Bearish option traders are hitting big profits in downside positions on Bank Ozk (OZK).
On Mar. 7, Market Rebellion’s Unusual Option Activity Service found that 10,300 May $40 puts were bought for $1.25 to $1.35 with shares at $43.03. This was clearly fresh buying, as the open interest in the contract before the activity appeared was just 290.
Those puts have traded up to $3.80 so far this session, over 2.5 times their purchase prices. The stock declined 11.95% 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.
OZK was last down 6.59% at $38.30.
Ready to start trading? Try Unusual Option Activity Essential. Learn how you can follow the “smart money” with a fresh UOA trade idea each week – including technical levels so that you know how to manage each trade!