$UPS puts deliver profits

$UPS puts deliver profits


Option traders scored big profits on downside positions in United Parcel Service, Inc. (UPS) today.

On Aug. 11Market Rebellion’s Unusual Activity Service found that 5,000 August $175 puts were bought for $0.80 to $1.10 above the existing open interest of 1,891 contracts with shares at $178.67.

Those puts have traded for as much as $2.90 this session, a 163.64% return, while the stock fell 3.15% 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.

UPS was last down 1.18% at $173.44.

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