Bears triple their money in $APC

Bears more than tripled their money in Anadarko Petroleum today.

On Dec. 10, Investitute’s proprietary programs flagged the purchase of 3,250 December $50 puts at the same second for $1.67 to $1.68 with shares at $50.93. This was clearly fresh buying, as volume was well above the strike’s open interest of 915 contracts before the trade occurred.

Those puts sold for $5.71 today, more than 3 times their purchase price. The stock fell 13.05% in the same time frame, underscoring how options can far outperform 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.

APC was down 5.84% to $44.15 today. The oil and gas producer has fallen alongside its peers as the price of crude has dropped to new 52-week lows, influenced by the state of the global economy and its outlook remaining a concern of investors.