Bears quadruple money in $DAL

Option traders collected major profits on downside positions opened in Delta Air Lines at the end of last week.

On Friday, Investitute’s market scanners found that 7,500 Weekly $54 puts expiring on April 27 were purchased for $0.30 to $0.37 with shares at $55.40. These were clearly new positions, as open interest in the strike was only 569 contracts before the activity appeared.

Those puts sold for $1.18 this afternoon, 4 times their initial purchase price. The stock fell 4% in the same time frame, showing how quickly options can far outperform moves in their underlying shares.

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.

DAL was down 1.46% to $53.81 today. The airline carrier followed the transportation sector lower as the broader market sold off.