$QQQ put prices double

Option traders are posting big gains on downside positions opened just over two weeks ago in the tech-heavy PowerShares QQQ Fund (QQQ) today.

On Oct. 13, Market Rebellion’s Unusual Activity scanners identified the purchase of 5,300 Weekly $285 puts, expiring on Nov. 13 for $7.75 to $7.82 with shares at $294.27. This was clearly a new position, as volume was well above the strike’s previous open interest of 4,822 contracts.

Those puts have traded for as much as $18.81 today, more than double their purchase prices. The stock declined 8.73% in the same time frame, underscoring how quickly 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.

QQQ was last lower this morning, trading last for $269.53, down 2.48% on the session. The exchange-traded fund reflects the Nasdaq 100 Index, which has retraced its monthly gains this week.