$QQQ bears triple their money

Downside option positions saw large gains from losses in the technology-heavy PowerShares QQQ Fund today.

On Jan. 23, Investitute’s proprietary programs cited the purchase of 24,852 March $166 puts for $2.56 with shares at $169.47. This was clearly a new position, as open interest in the strike was only 1,954 contracts before that session began.

Those calls puts traded for $9.50 today, more than 3.5 times their purchase price. The stock rose 6.3% in the same time, illustrating the kind of leverage that can be achieved 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.

QQQ fell 3.94% to $158.12. The exchange-traded fund reflects the Nasdaq 100 Index. Its largest holdings are Apple, Microsoft, Amazon.com, Facebook, and Alphabet.