$APP bears download gains

Bearish option traders are scoring big gains today in downside put positions opened two sessions ago in Applovin Corp (APP).

On Feb. 15, Market Rebellion’s Unusual Activity tracking systems detected the purchase of 2,500 February $70 puts, expiring tomorrow, for $2.35 as part of a bearish spread with shares at $74.99. Volume was well above the strike’s previous open interest of 172 contracts, showing that this was fresh interest.

Those puts have traded up to $15.80 today, more than 6 times their purchase price. The stock declined 27.64% in the same time period, a large move but nowhere near that of its options on a relative basis.

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.

APP was last down 6.73% to $64.08 in late session trade.