Option traders are scoring gains today on downside positions opened in Trade Desk Inc (TTD) last week.
On Nov. 1, Market Rebellion’s Unusual Option Activity Service found that 8,000 November $65 puts were bought for $2.82 to $2.88 with shares at $69.80. This was clearly fresh buying, as open interest in the contract was just 417 before the activity appeared.
Those puts have traded for as much as $5.20 this session, an 80.56% return, while the stock fell 13.41% 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.
TTD is down 18.14% to $62.88 in midday trade.
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