$LUMN put prices light up overnight

$LUMN put prices light up overnight

by

Bearish Lumen Technologies Inc (LUMN) option traders who opened downside positions yesterday are already seeing gains.

On Feb. 7Market Rebellion’s Unusual Option Activity Service found that 30,000 February $4.50 puts were bought for $0.12 to $0.16 above the existing open interest of 2,177 contracts with shares at $5.12.

Those puts have traded up to $0.76 today, more than 4.5 times their purchase prices. The stock declined 25.98% 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.

LUMN was last down 21.74% at $3.90.

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