Bearish option positions opened in Netflix (NFLX) yesterday are streaming higher today as shares fall.
On Sep. 14, Market Rebellion’s Unusual Activity Service found that 11,000 September $400 puts were bought for $1.68 to $3.44 above the existing open interest of 7,795 contracts with shares at $408.84.
Those puts have traded for as much as $5.15 this session, a 49.71% return, while the stock fell 3.38% 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 0.48% at $398.57.
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