Bears ring the register at $UNFI

Option traders more than doubled their money on downside positions in United Natural Foods today.

On Oct. 22, Investitute’s proprietary programs flagged the purchase of 2,100 December $30 puts for $5.40 to $5.80 with shares at $25.17. There was no open interest in the strike before the trade occurred, showing that it was a new position.

Those puts sold for $14.70 this morning, 2.5 times their average purchase price. The stock plunged 41.6% in the same time period, a huge move but still 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.

UNFI plummeted 24.58% to $14.88 today. The organic-grocery producer, which was acquired by Supervalu earlier this year, fell after reporting disappointing quarterly results.