Bearish option traders are marking gains in downside positions on Horizon Therapeutics PLC (HZNP).
On Mar. 22, Market Rebellion’s Unusual Option Activity Service found that 2,500 June $100 puts were bought for $2.90 as part of a bearish spread above the existing open interest of 38 contracts with shares at $108.19.
Those puts traded up to $8.35 this session, a 187.93% return, while the stock declined 12.31% 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.
HZNP was down 14.17% to close at $96.34.
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