Options News
$QQQ put prices skyrocket tenfold
Option traders posted exponential gains on downside positions in the tech-heavy PowerShares QQQ Fund before it rebounded today. On Jan. 23, Investitute’s proprietary systems showed that 6,120 Weekly $163.50 puts expiring this Friday were purchased in one print for $0.67. The trade was part of a bearish spread with shares at $168.71. Those puts traded […]
Option traders posted exponential gains on downside positions in the tech-heavy PowerShares QQQ Fund before it rebounded today.
On Jan. 23, Investitute’s proprietary systems showed that 6,120 Weekly $163.50 puts expiring this Friday were purchased in one print for $0.67. The trade was part of a bearish spread with shares at $168.71.
Those puts traded for $7.10 today, more than 10 times their purchase price. The stock fell 8.1% in the same time, illustrating how options can far outperform moves in their underlying shares. It was the second winning QQQ put trade posted on Investitute in as many days.
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 dropped this morning before recovering to close at $162.31, up 2.64% on the session. The exchange-traded fund reflects the Nasdaq 100 Index, and its largest holdings are Apple, Microsoft, Amazon.com, Facebook, and Alphabet.