$CNK option bears triple money

Downside option positions in Cinemark Holdings, Inc. (CNK) that expire next Friday are rewarding bearish traders today.

On Sep. 1Market Rebellion’s Unusual Activity Service flagged the purchase of 4,800 October $12.50 puts as part of a bearish spread for $0.70 to $0.75 with shares at $12.61. This was clearly a new position, as open interest in the strike was a just 336 contracts before that session began.

Those puts are currently marked at $2.50, over 3 times their purchase prices. The stock declined 21.49% in the same time frame, underscoring how options can far outperform their underlying shares.

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.

CNK was last down 5.22% at $9.90 in early trade.

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Chris Sykora

Chris Sykora is an Unusual Option Activity Analyst and Cryptocurrency editor for Market Rebellion.


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