Options News
Bears double money in $ROST
Ross Stores (ROST) fell along with other retailers today, resulting in big gains for downside option positions opened last week. On Aug. 13, Market Rebellion’s Unusual Activity Service found that 2,000 August $124 puts were bought for $2.15 to $2.35 above the existing open interest of 19 with shares at $125.00. Those puts traded up to $4.45 […]
Ross Stores (ROST) fell along with other retailers today, resulting in big gains for downside option positions opened last week.
On Aug. 13, Market Rebellion’s Unusual Activity Service found that 2,000 August $124 puts were bought for $2.15 to $2.35 above the existing open interest of 19 with shares at $125.00.
Those puts traded up to $4.45 this session, about double their average purchase price. The stock dropped 3.61% in the same period, showing how options can far outperform their underlying shares.
Long puts lock in the price where a stock can be sold no matter how far it might drop, gaining value in a selloff with the potential for significant leverage. The contracts can be purchased either as an outright bearish bet or a hedge on a long-stock position.
ROST was down 3.24% to $120.76 at the close. The discount chain fell along with other retailers today after retail sales undershot estimates this morning.