$PTON bears cycle for profits

$PTON bears cycle for profits


Option traders are riding for fast profits on downside positions in Peloton (PTON) today.

On Aug. 7Market Rebellion’s Unusual Activity Service found that 2,600 August $8.50 puts were bought for $0.46 to $0.57 above the existing open interest of 578 contracts with shares at $8.57.

Those puts have traded for as much as $1.50 this session, a 163.16% return, while the stock fell 18.44% in the same time frame, illustrating the kind of leverage that can be achieved quickly with options.

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.

PTON was last up 1.74% at $7.02.

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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