$BBBY bears score again

Option traders are cashing in on bearish positions in Bed Bath & Beyond (BBBY) for the second session in a row.

On Jan. 7, Market Rebellion’s Unusual Activity Service flagged the purchase of 5,000 May $17 puts bought mostly in one print of 4,413 for $3 with shares at $16.31. Open interest in the strike was only 260 contracts before the trade occurred, showing that this was a new position.

Those puts sold for $5.65 today, almost twice their purchase price. The stock fell 28.51% in the same time period, illustrating how options can far outperform moves in their underlying shares on a relative basis.

It is the second winning downside trade in the name posted on Market Rebellion in as many days.

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.

BBBY is down 1,36% to $11.63 this morning. The home-products retailer fell short of expectations in same-store sales after the market closed Tuesday.