As Tech Selloff Worsens, Options Traders Brace for More Bleeding
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U.S. technology stocks are on pace for their biggest weekly drop since March, and someone in the options market is betting that things are going to get worse before they get better.
Hedging picked up Thursday in the Invesco QQQ Trust, an exchange-traded fund that tracks the Nasdaq 100 Index, as one investor bought quarter-end puts with a strike price of $174, initiating a bet the fund will fall 4 percent from current levels. It was the biggest trade of the day among all contracts on the $71.7 billion fund. While the ETF, commonly known as QQQ for its ticker symbol, has dropped more than 3 percent since the end of August, an additional 4 percent slump over the next few weeks would hardly be a unique selloff.