Options News
$Z bears quintuple their money
Downside option positions turned exponential gains in Zillow today. On June 21, Investitute’s proprietary programs flagged the purchase of 3,400 August $60 puts for $2.20 to $2.30 with shares at $64.47. These were clearly new positions, as open interest in the strike was only 306 contracts before the activity appeared. Those puts traded for $12 […]
Downside option positions turned exponential gains in Zillow today.
On June 21, Investitute’s proprietary programs flagged the purchase of 3,400 August $60 puts for $2.20 to $2.30 with shares at $64.47. These were clearly new positions, as open interest in the strike was only 306 contracts before the activity appeared.
Those puts traded for $12 this morning, more than 5 times their purchase prices. The stock dropped 25.62% in the same time period, a large move but nowhere near that of its 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.
Z dropped 14.77% to $49.56 today. The real-estate information service missed revenue forecasts while announcing the purchase of Mortgage Lenders of America for an undisclosed sum.