Bears score as $GLW pulls back

Option traders have more than doubled their money on downside positions in Corning.

On Nov. 1, Investitute’s proprietary programs flagged the purchase of 5,000 January $33 puts for $1.70 to $1.78 with shares at $32.75. This was clearly fresh buying, as open interest in the strike was only 405 contracts before the trades occurred.

Those puts sold for $4.65 today, more than 2.5 times their purchase prices. The stock fell 13.43% in the same time frame, illustrating the kind of leverage that can be achieved with options.

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.

GLW was down 6.19% to $28.03 today. The specialty-glass maker had rebounded in the last week but fell along with other iPhone suppliers after Apple’s surprise reduction in guidance last night.