Fortinet (FTNT) has been declining this week, delivering profits to bearish option positions.
On Oct. 9, Market Rebellion’s Unusual Activity Service found that 2,500 Weekly $59 puts, expiring Oct. 13, were bought for $0.60 to $0.65 above the existing open interest of 489 contracts with shares at $59.85.
Those puts have traded for as much as $2.55 this session, a 292.31% return, while the stock fell 5.66% 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.
FTNT was last down on the session by 0.97% at $57.44.
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