Bears ride $RCL to fast gains

Bearish option traders have doubled their money in Royal Caribbean Cruises (RCL).

On Friday morning last week, Jun. 19, our Unusual Activity Service found that 3,000 Weekly $59 puts expiring on Jul. 2 were bought as part of a complex bearish spread for $4.44 above open interest of 91 contracts with shares at $59.50.

Those puts traded for as much as $9.40 today, more than double their purchase prices. The stock fell 14.4% in the same time frame, underscoring how options can far outperform 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.

RCL was down 6.17% to $51.86 today. The cruise operator has fallen sharply since Friday afternoon, after it and fellow Cruise Lines International Association members announced an extension of suspensions on sailings from U.S. ports until Sep. 15.