Options News
$ON bears make quick gains
On Semiconductor yielded exponential gains on downside option positions today. On Friday, Aug. 2, Investitute’s tracking systems detected the purchase of 4,500 August $19 puts in one print for $0.45 with shares at $20.11. This was clearly fresh buying, as open interest in the strike was just 1,145 contracts before the trades occurred. Those puts […]
On Semiconductor yielded exponential gains on downside option positions today.
On Friday, Aug. 2, Investitute’s tracking systems detected the purchase of 4,500 August $19 puts in one print for $0.45 with shares at $20.11. This was clearly fresh buying, as open interest in the strike was just 1,145 contracts before the trades occurred.
Those puts traded for $1.41 today, over 3 times their purchase price. The stock fell 11.34% in the same time frame, showing how quickly options can far outpace gains in 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.
ON closed down by 10.66% at $17.85 today. The chip maker reported earnings before the market opened this morning, guiding its fiscal year lower.