$OPEN option bears close in on gains

Opendoor Technologies Inc (OPEN) is pulling back again this session, and option bears are closing in on big gains.

On Nov. 19, Market Rebellion’s Unusual Activity Service found that 10,000 Weekly $19.50 puts, expiring today, were bought for $0.57 to $0.60 as part of a bearish spread above the existing open interest of just 205 contracts with shares at $19.80.

Those puts have traded up to $3.38 today, more than 5.5 times their purchase prices. The stock fell 18.33% in the same time frame, showing how quickly options can far outperform moves in the 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.

OPEN was last down 3.32%, trading at $16.44 today.