Fast profits for $AMZN put buyers

Fast profits for $AMZN put buyers

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Option traders are posting fast profits today as Amazon.com (AMZN) falls.

This morning on Sep. 26Market Rebellion’s Unusual Option Activity Service found that 25,000 Weekly $120 puts, expiring Sep. 29, were bought for $0.18 to $0.24 with shares at $127.61. This was clearly fresh buying, as open interest in the contract was just 6,199 before the activity appeared.

Those puts have traded for as much as $0.49 this session, a 104.17% return, while the stock fell 1.79% 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.

AMZN was last down on the session by 4.11% at $125.87.

Ready to start trading? Try Unusual Option Activity Essential. Learn how you can follow the “smart money” with a fresh UOA trade idea each week – including technical levels so that you know how to manage each trade!

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