$TAN put prices light up

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

On Feb. 17, Market Rebellion’s Unusual Activity Service found that 4,000 Weekly $63 puts, expiring this Friday, were bought as part of a bearish roll for $1.02 to $1.03 against no existing open interest with shares at $65.54.

Those puts have traded up to $3.30 today, over triple their purchase prices. The stock declined 7.9% 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 was last lower on the day by 3.86% at $60.07.