Plug Power (PLUG) is powering lower today, and bearish option traders are taking profits.
Yesterday on Jan. 18, Market Rebellion’s Unusual Option Activity Service found that 5,000 Weekly $17 puts, expiring Jan. 27, were bought for $0.64 to $0.65 with shares at $17.24. This was clearly fresh buying, as open interest in the contract was just 982 before the activity appeared.
Those puts traded up to $2.00 this session, more than 3 times their purchase prices. The stock fell 12.18% in the same time frame, showing how quickly options can far outperform moves in their underlying shares 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.
PLUG was last lower on the day by 8.35% at $15.30.
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!
