$BITO option bears score

Bearish option traders have made big gains in downside positions on the ProShares Bitcoin Strategy ETF (BITO).

On Nov. 8Market Rebellion’s Unusual Option Activity Service found that 12,000 November $11 puts were bought for $0.55 to $0.67 with shares at $12.06. This was clearly fresh buying, as the open interest in the contract before the activity appeared was just 5,796.

Those puts traded up to $1.65 this session, over 2 times their purchase prices. The stock declined 19.98% 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.

BITO finished the session down 13.21% at $9.66.

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