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Buying Puts At A Market Peak

Tim Knight noted yesterday that Bed Bath & Beyond, Inc. (BBBY) had ended its meme-run right at the market peak on August 16th.

It's absolutely poetic that the $BBBY insanity ended exactly at the MOMENT the market peaked on August 16th. It has collapsed 76% in the weeks since then.

— Slope of Hope with Tim Knight (@SlopeOfHope) September 24, 2022

As it happened, I bought puts on BBBY as well as another retailer, Five Below, Inc. (FIVE) and AMC Entertainment Holdings, Inc. (AMC) in my personal account on August 16th.

Bought puts on $AMC, $BBBY, and $FIVE in case he’s right. https://t.co/LGBIOlmBBd

— David Pinsen (@dpinsen) August 16, 2022

I sold the FIVE puts a couple of weeks later, but am still holding the AMC and BBBY puts.

Selling Puts On Friday

Friday apparently had the highest demand for puts ever.

More than 33 million puts traded on Friday, the highest single day of put volume since data began to be collected roughly 30 years ago. pic.twitter.com/4TiWOukd22

— Barchart (@Barchart) September 24, 2022

I didn’t know that at the time, but I took advantage of the market drop to sell puts on Peloton Interactive, Inc. (PTON).

This was the second time I’ve sold $5 strike puts on Peloton: the first time, I received a credit equal to about 7% of strike value; this time, about 10%. For all of its management’s missteps, Peloton has millions of loyal users. 

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