Bears take the driver’s seat with $UBER

Option traders turned exponential profits on downside positions in Uber (UBER) today.

Last Friday on Jun. 5, Market Rebellion’s Unusual Activity Service found that 9,800 Weekly $34 puts expiring on Jun. 12 were bought for $0.16 to $0.31 with shares at $37.08. Open interest in the strike was only 843 contracts before the trades occurred, indicating that this was new positioning.

Those puts have traded for as much as $2.40 today, at least 7.5 times their purchase prices. The stock fell 14.48% 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.

UBER is lower this afternoon, last at $31.99 or down 8.15%. The ride-sharing service’s shares are lower after the company lost its long-discussed opportunity to acquire GrubHub (GRUB), which today agreed to be acquired by Just Eat Takeaway.com (TKAYY).