Put options active in market meltdown

Published: July 27, 2007, 7:15 am

Filed under: After the bell, Major movement, Apple Inc (AAPL), Black Friday, Options, S and P 500, DJIAIt can be interesting to take a quick look at the most active put options in a down market. What are investors buying insurance on? Stock options are fancy financial instruments for controlling risk. They are like the options CEO's get but they are traded over the counter like stocks. That means that you as a common investor can buy an option if you think a stock like Apple Inc.(NASDAQ: AAPL) is going to shoot up or fall. There are two types of options calls and puts. "Calls" let you buy a stock. (call it away). "Puts" let you sell a stock (put it to someone else). In a down market investors will buy puts as an insurance policy against the stock falling. For each stock there are about 100 options between several different month and strike combination. Looking at a screen from yesterday, just before the close shows some of the more active puts. So what does all this mean? Well, it

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