Bears hit a gusher in $OIH

Option traders are hitting a gusher this session in downside positions on the VanEck Vectors Oil Services ETF (OIH).

On Aug. 28, Market Rebellion’s Unusual Option Activity Service found that 15,000 October $275 puts were bought for $4.73 with shares at $294.78. This was clearly fresh buying, as open interest in the contract was just 104 before the activity appeared.

Those puts have traded for as much as $14.35 so far this session, a 203.38% return, while the stock fell 9.37% 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.

OIH is currently down 0.037% at $268.53.