$ARKK option bears quadruple money

Bearish option traders are riding big gains in the ARK Innovation ETF (ARKK).

On Jan. 7, Market Rebellion’s Unusual Activity programs detected the the purchase of 2,132 March $69.22 puts for $2.09 as part of a bearish spread with shares at $84.85.

Those puts traded for as much as $9.80 this session, over 4 times their purchase price. The stock fell 28.17% 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.

ARKK closed the session lower by 3.96% at $60.88.