Bears score again in $NTNX

Option traders posted exponential gains on downside positions in Nutanix for the second time in less than a week.

On Feb. 25, Investitute’s proprietary programs flagged the purchase of 10,000 March $50 puts for $2.03 as part of a bearish spread with shares at $52.65. Open interest in the strike was only 1,469 contracts before the trade occurred, showing that this was a new position.

Those puts ended today’s session marked at $16.30, more than 8 times their purchase price. The stock dropped 35.71% in the same time frame, a large move but nowhere near that of its options on a relative basis.

It is the second winning trade in the name posted on Investitute in the last three sessions.

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.

NTNX fell to $33.05 this afternoon before recovering to close at $33.85, up 1.01% on the session. The business-cloud technology company missed earnings estimates and issued disappointing guidance after the market closed on Feb. 28.