$ICLN put prices power up

$ICLN put prices power up

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Option traders are scoring big gains in downside positions on the iShares Global Clean Energy ETF (ICLN) today.

On Oct. 2Market Rebellion’s Unusual Option Activity Service found that 34,000 October $14 puts were bought for $0.25 with shares at $14.30. This was clearly fresh buying, as the open interest in the contract before the activity appeared was just 9.

Those puts traded for as much as $0.65 today, a 160% return, while the stock fell 4.97% in the same time frame, showing how quickly options can far outperform moves in their underlying shares 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.

ICLN was last up 0.4% at $13.72.

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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