$TLT puts yield gains

Option traders are collecting a positive yield on downside positions in the iShares 20+ Year Treasury Fund (TLT) today.

On Feb. 8, Market Rebellion’s Unusual Activity programs detected the the purchase of 7,000 June $125 puts as part of a bearish spread for $1.46, above the existing open interest of 860, with shares at $138.12.

Those puts have traded for as much as $9.20 so far this session, over 6 times their purchase price. The stock fell 15.23% in the same time frame, illustrating the kind of leverage that can be achieved quickly with options.

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.

TLT was last lower on the day by 1.81% to $117.09.