Nokia (NOK) option bears made the call for big profits today.
On Oct. 17, Market Rebellion’s Unusual Activity Service found that 16,000 October $4.50 puts, expiring tomorrow, were bought for $0.11 to $0.15 with shares at $4.57. This was clearly fresh buying, as open interest was only 6,673 contracts before the activity appeared.
Those puts have traded up to $0.43 so far this session, over 2.5 times their purchase price. The stock declined 10.07% in the same time frame, underscoring how options can far outperform their underlying shares.
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.
NOK was last at $4.28 today, down 6.15%.
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