$TAN option bears quadruple money

Option traders are seeing their bearish positions opened just last Friday sizzle today in the Invesco Solar ETF (TAN).

On Aug. 13, Market Rebellion’s Unusual Activity Service found that 4,000 August $82 puts were bought as part of a bearish roll for $1.05 above the existing open interest of 152 with shares at $82.80.

Those puts have traded up to $4.40 today, over quadruple their purchase price. The stock declined 6.1% in the same time period, a large move but nowhere near that of its options 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.

TAN ended the session lower by 2.61% at $78.48. The ETF, which tracks the investment results of the MAC Global Solar Energy Index, traded lower this session along with the broader market.