Option bears get $TAN

Option traders are seeing their bearish positions opened just last Friday sizzle today in the Invesco Solar ETF (TAN).

On Apr. 30, Market Rebellion’s Unusual Activity tracking systems detected the purchase of 5,000 Weekly $82 puts expiring on May 7 for $1.40 as part of a bearish roll with shares at $83.39. Volume was well above the strike’s previous open interest of 60 contracts, showing that this was fresh interest.

Those puts have traded up to $5.40 today, over triple their purchase price. The stock declined 7.76% in the same time period, a large move but nowhere near that of its options on a relative basis.

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.

TAN was last down on the session by 6.74% at $76.57 in late afternoon trade. The ETF, which tracks the investment results of the MAC Global Solar Energy Index, has traded lower this session along with the broader market.