Option bears triple money in $XRT

Bearish option traders have tripled their money on downside positions in the SPDR S&P Retail Fund (XRT) today.

On Aug. 19Market Rebellion’s Unusual Option Activity Service found that 2,250 Weekly $65 puts, expiring today, were bought for $0.65 as part of a bearish spread above the existing open interest of 14 contracts with shares at $69.45.

Those puts have traded up to $2.44 this session, over 3.5 times their purchase price. The ETF fell 9.92% at the same time, showing how quickly options can far outpace gains in 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.

The XRT was last lower by 1.17% at $62.53 this afternoon.

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