$IYR put buyers score profits

Bearish option traders’ downside put positions are scoring today in the iShares US Real Estate ETF (IYR) as shares trade lower.

On Aug. 23Market Rebellion’s Unusual Option Activity Service found that 10,000 Weekly $97 puts, expiring today, were bought for $1.26 as part of a bearish spread above the existing open interest of 2,562 contracts with shares at $97.27.

Those puts have traded up to $3.15 today, 2.5 times their purchase price. The ETF declined 3.54% 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.

The IYR was last down 0.79% to $93.68 in afternoon trade.

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!

Black Friday Deal—Save 15% OFF Any Trading Service!

Use Code blackfriday2022 at checkout.