Bears score big on $ACAD losses

Downside option traders raked in substantial profits in Acadia Pharmaceuticals today.

On July 19, Investitute’s proprietary programs flagged the purchase of 2,100 August $17 puts for $1.45 as part of a bearish roll with shares at $17.30. This was clearly a new position, as open interest in the strike was only 336 contracts before that session began.

Those puts sold for $3.50 this morning, about 2.5 times their purchase price. The stock fell 21.73% 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.

ACAD was down 0.78% to $13.91 today. Weak second-quarter revenues pushed the biopharmaceutical company lower after the market closed yesterday.