$NYCB option bears bank fast profits

$NYCB option bears bank fast profits

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Bearish option traders are banking profits in downside positions on New York Community Bancorp, Inc. (NYCB).

On Feb. 5Market Rebellion’s Unusual Option Activity Service found that 19,000 July $4 puts were bought for $0.50 to $0.60 above the existing open interest of 992 contracts with shares at $5.45.

Those puts have traded up to $1.51 this session, a 151.67% return, while the stock declined 24.59% 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.

NYCB closed down 22.22% at $4.20.

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