Bears make fast profits with $IRDM puts

Option traders are posting fast profits today on bearish positions opened in Iridium Communications Inc
(IRDM).

Yesterday morning, on Jul. 24, Market Rebellion’s Unusual Option Activity Service found that 2,700 August $55 puts were bought for $0.80 to $1.05 above the existing open interest of 117 contracts with shares at $60.25 .

Those puts traded up to $5.00 this session, a 376.19% return, while the stock declined 16.55% in the same time period, 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.

IRDM was last down 14.36% at $51.35.