Options News
$SPY put prices surge 15-fold
Bearish option traders racked up astronomic gains as the SPDR S&P 500 Fund plunged today. On Jan. 26, Investitute’s tracking systems found that 18,000 Weekly $265 puts expiring on March 9 were purchased for $0.57. There was no open interest in the strike before the trade occurred, showing that it was a new position. Those […]
Bearish option traders racked up astronomic gains as the SPDR S&P 500 Fund plunged today.
On Jan. 26, Investitute’s tracking systems found that 18,000 Weekly $265 puts expiring on March 9 were purchased for $0.57. There was no open interest in the strike before the trade occurred, showing that it was a new position.
Those puts traded for $8.56 today, 15 times their purchase price. The stock dropped 7.44% in the same time frame, underscoring how options can far outperform moves in their underlying shares. Investitute co-founder Pete Najarian discussed recent SPY puts on CNBC’s “Mad Money” with host Jim Cramer on Friday.
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.
SPY dropped 4.09% to $264.18 today. Apple, Microsoft, Amazon.com, and Facebook are the top four holdings in the exchange-traded fund, which tracks the S&P 500.