$BX option bears turn huge gains

Option traders are turning huge gains on bearish positions opened in Blackstone (BX) today.

On Oct. 28Market 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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