Bears score fast money in $WFT

Option traders cashed in on downside positions in Weatherford just before they expired yesterday.

On Wednesday, Investitute’s proprietary programs showed that 2,500 Weekly $4 puts that expired yesterday were purchased in one print for $0.17 with shares at $4.03. Volume was more than double the strike’s open interest of 1,203 contracts, showing that this was a new position.

Those puts traded for $0.62 yesterday, more than 3.5 times their purchase price. The stock fell 15.6% in the same time frame, underscoring how quickly options can far outpace 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.

WFT dropped 13.58% to $3.50 yesterday. The oilfield-services company reported a wider loss than expected for the fourth quarter.