Option traders are turning huge gains on bearish positions opened in Blackstone (BX) today.
On Oct. 28, Market Rebellion’s Unusual Option Activity Service found that 5,500 January $85 puts were bought for $4.30 as part of a bearish spread above the existing open interest of 997 contracts with shares at $93.79.
Those puts have traded up to $11.64 today, over 2 times their purchase price. The stock declined 20.82% 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.
BX was last down 3.76% to $74.49 in afternoon trade.
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