Bears score big as $ATHN drops

Option traders have tripled their money on downside positions in AthenaHealth.

On Sept. 12, Investitute’s proprietary programs flagged the purchase of 1,200 October $135 puts as part of a bearish spread with shares at $145.08. Open interest in the strike was only 444 contracts before that session began, showing that this was a new position.

Those puts traded for $13 today, more than 3 times their purchase price. The stock declined 15.58% in the same time period, illustrating how 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.

ATHN was down 2.44% to $122.91. today. The health-services provider has fallen sharply since Sept. 18, when activist investor Elliott Management withdrew an offer to buy the company for $160 a share.