Bears score big as $UAL plunges

Option traders tripled their money in downside positions on United Continental today as shares fell sharply on comments by its chief executive.

On Monday, Investitute’s proprietary programs cited the purchase of 1,475 February $76 puts in one print for $2.57 as part of a bearish spread with shares at $76.09. There was no open interest in the strike before the trade occurred, showing that it was a new position.

Those puts sold for $7.47 today, 3 times its purchase price. The stock fell 9.6 percent in the same time frame, illustrating how quickly options can 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.

UAL dropped 11.44 percent ot $69.05 today. The airline operator initially rallied after beating quarterly expectations last night but reversed when CEO Oscar Munoz raised fears of a potential price war on his conference call, dragging down rival carriers as well.