Bears make fast profits with $ADM puts

Bears make fast profits with $ADM puts


Option traders are posting fast profits today on bearish positions opened in Archer-Daniels-Midland Co (ADM).

This morning, on Jun. 14Market Rebellion’s Unusual Option Activity Service found that 2,700 Weekly $70 puts, expiring on Jun. 30, were bought as part of a bearish roll for $0.27 to $0.35 above the existing open interest of 462 contracts with shares at $74.23.

Those puts traded up to $0.77 this session, a 120% return, while the stock declined 1.75% 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.

ADM was last down 1.39% at $73.26.

Ready to start trading? Try Unusual Option Activity Essential. Learn how you can follow the “smart money” with a fresh UOA trade idea each week – including technical levels so that you know how to manage each trade!

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