Options News
Patient put buyers score in $QCOM
Downside option positions in Qualcomm (QCOM) that expire next Friday are rewarding patient bearish traders today. On Mar. 25, Market Rebellion’s Unusual Activity Service flagged the purchase of 3,500 October $130 puts for $7.60 to $7.95 with shares at $156.73. This was clearly a new position, as open interest in the strike was a just 227 contracts […]
Downside option positions in Qualcomm (QCOM) that expire next Friday are rewarding patient bearish traders today.
On Mar. 25, Market Rebellion’s Unusual Activity Service flagged the purchase of 3,500 October $130 puts for $7.60 to $7.95 with shares at $156.73. This was clearly a new position, as open interest in the strike was a just 227 contracts before that session began.
Those puts traded for as much as $21.01 today, over 2.5 times their purchase prices. The stock declined 30.45% in the same time frame, underscoring how options can far outperform their underlying shares.
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.
QCOM was down 3.99% to close at $110.03 this afternoon.
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