Patient put buyers score in $QCOM

Downside option positions in Qualcomm (QCOM) that expire next Friday are rewarding patient bearish traders today.

On Mar. 25Market Rebellion’s Unusual Activity Service flagged the purchase of 3,500 October $130 puts for $7.60 to $7.95 with shares at $156.73. This was clearly a new position, as open interest in the strike was a just 227 contracts before that session began.

Those puts traded for as much as $21.01 today, over 2.5 times their purchase prices. The stock declined 30.45% 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.

QCOM was down 3.99% to close at $110.03 this afternoon.

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!

Chris Sykora

Chris Sykora is an Unusual Option Activity Analyst and Cryptocurrency editor for Market Rebellion.

Black Friday Deal—Save 15% OFF Any Trading Service!

Use Code blackfriday2022 at checkout.

Days
Hours
Minutes
Seconds