Option traders are scoring gains today on downside positions opened in Trade Desk Inc (TTD) last month.
On Oct. 11, Market Rebellion’s Unusual Option Activity Service found that 3,700 November $75 puts were bought for $2.12 to $2.30 with shares at $85.40. This was clearly fresh buying, as open interest in the contract was just 593 before the activity appeared.
Those puts have traded for as much as $7.88 this session, an 242.61% return, while the stock fell 18.27% 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 1.59% to $69.83 in midday trade.
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