$ARKF option bears score large profits

Bearish option traders are riding big gains in the Ark Fintech Innovation ETF (ARKF).

On Feb. 16, Market Rebellion’s Unusual Activity programs detected the the purchase of 8,000 March $30 puts for $1.40 as part of a bearish roll above the existing open interest of 1,192 with shares at $32.13.

Those puts traded for as much as $7.10 this session, over 5 times their purchase price. The stock fell 28.63% in the same time frame, illustrating the kind of leverage that can be achieved quickly with 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.

ARKF was last lower on the day by 4.81% at $22.97.