Options News
Put prices quadruple in $LOW
Lowe’s has proven to be an opportune target for bearish option traders. On Sept. 13, Investitute’s market scanners identified the purchase of 2,000 April $97.50 puts for $2.68 with shares at $112.49. Open interest in the strike was a mere 40 contracts before that session began, showing this was a new position. Those puts were […]
Lowe’s has proven to be an opportune target for bearish option traders.
On Sept. 13, Investitute’s market scanners identified the purchase of 2,000 April $97.50 puts for $2.68 with shares at $112.49. Open interest in the strike was a mere 40 contracts before that session began, showing this was a new position.
Those puts were marked at $10.60 today, 4 times their purchase price. The stock fell 19.66% in the same time period, illustrating how options can far outperform moves in their underlying shares on a relative basis.
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.
LOW was down 3.12% to $90.45 today. The home-improvement chain rallied after quarterly results last month but has pulled back in recent days with the broader market.