Quick profits for $AMZN put buyers

Quick profits for $AMZN put buyers

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Option traders are posting quick profits today as Amazon.com (AMZN) falls.

This morning on Jan. 2Market Rebellion’s Unusual Option Activity Service found that 15,000 Weekly $148 puts, expiring Jan. 5, were bought for $0.43 to $0.62 with shares at $150.68. This was clearly fresh buying, as open interest in the contract was just 2,837 before the activity appeared.

Those puts have traded for as much as $1.35 this session, a 117.74% return, while the stock fell 1.51% 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.

AMZN was last down on the session by 1.56% at $149.58.

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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