$PLUG option bears triple money

Plug Power (PLUG) is powering lower today, and bearish option traders are taking profits.

Yesterday on Jan. 18Market 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!

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