Option traders have traded for quick profits in downside bets on Caesars Entertainment (CZR) today.
Today on Nov. 1, Market Rebellion’s Unusual Option Activity Service found that 7,500 Weekly $41.50 puts, expiring this Friday, were bought for $0.32 to $0.57 with shares at $41.96. This was clearly fresh buying, as open interest in the contract was just 378 before the activity appeared.
Those puts have traded for as much as $1.15 this session, an 101.75% return, while the stock fell 3.24% in the same time frame, illustrating the kind of leverage that can be achieved quickly with options.
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.
CZR was last trading at $40.74, up 3.22% for the day.
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