Bears triple their money in $TSN

Bears who opened downside option positions in Tyson Foods (TSN) just two weeks ago are seeing their bets pay off today.

On Jan. 23, Market Rebellion’s Unusual Option Activity Service flagged the purchase of 2,000 February $80 puts for $0.65 to $0.70 with shares at $86.91. Volume was well above the strike’s previous open interest of 1,313 contracts, showing that this was fresh buying.

Those puts changed hands for as much as $2.25 today, triple their original prices. The stock fell as much as 8.39% in that same time period, a significant move but nowhere near that of its 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.

TSN closed this session down by 5.18% at $79.77. The meat producer missed revenue expectations in its quarlertly earnings report before the opening bell today.