Bears score big gains $PG

Bearish option traders are seeing big gains today in Procter & Gamble (PG).

On May 3, Market Rebellion’s Unusual Option Activity Service found that 5,200 June $155 puts were bought for $4.60 to $4.64 as part of a bearish spread with shares at $155.70. This was clearly fresh buying, as open interest in the contract was just 3,694 before the activity appeared.

Those puts were last marked at $13.00, more than 2.5 times their purchase prices. The stock fell 8.97% in the same time frame, showing how quickly options can far outperform moves in their underlying shares 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.

PG is currently lower by 0.85% at $141.85.