Bearish option positions opened in Netflix (NFLX) yesterday are streaming higher today as shares fall.
On Oct. 12, Market Rebellion’s Unusual Activity Service found that 3,200 Weekly $360 puts, expiring Oct. 13, were bought for $1.42 to $2.45 above the existing open interest of 2,686 contracts with shares at $367.97.
Those puts have traded for as much as $8.00 this session, a 226.53% return, while the stock fell 4.32% 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.
NFLX was last down on the session by 1.95% at $354.14.
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