Bears double money in $CRC

California Resources (CRC) has rebounded from 52-week lows this week, but option traders still profited from downside positions this morning

On Sept. 17, Market Rebellion’s proprietary programs flagged the purchase of 5,000 November $13 puts bought for 1.90 above open interest of 904 contracts as part of a bearish spread with shares at $14.52. This was clearly a new position, as open interest in the strike was a mere 370 contracts before that session began.

Those puts traded for $3.90 early today, twice their purchase price. The stock fell 36.16% in the same time, 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.

CRC fell to $8.69 this morning but rebounded to $9.03 this afternoon, up 5.61% on the session. The oil and gas producer will report earnings after the market closes on Nov. 4.