$BBBY puts rocket fivefold

Bearish option traders are making a killing as Bed Bath & Beyond (BBBY) trades at 52-week lows.

On May 17, Investitute’s proprietary programs cited the purchase of 20,000 August $12.50 puts bought for $0.65 to $0.67 as part of a bearish roll with shares at $15.06 .This was clearly a new position, as open interest in the strike was 2,192 contracts before that session began.

Those puts traded for as much as $3.22 today, about 5 times their initial purchase price. The stock plunged 38.18% in the same time frame, 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.

BBBY is down 0.57% to $9.31 in late morning trading after hitting a 52-week low of $9.28. The struggling retailer has been falling since reporting earnings on July 10.