$ARKG option bears double money

Bearish option traders are riding big gains in the ARK Genomic Revolution ETF (ARKG).

On Apr. 19, Market Rebellion’s Unusual Activity programs detected the the purchase of 5,000 Weekly $42 puts, expiring tomorrow, for $1.15 to $1.20 above the existing open interest of 4,793 with shares at $41.65.

Those puts traded for $1.65 this session and were last marked for $2.55, over 2 times their purchase prices. The stock fell 6.41% 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.

ARKG was last lower on the day by 4.41% at $38.98.