$BOX bears quintuple their money

Box plunged on poor quarterly numbers today, yielding huge profits on downside option positions opened just four sessions ago.

On Monday, Investitute’s proprietary programs flagged the purchase of 2,700 March $22 puts for $0.65 with shares at $23.61. Volume was well above the strike’s open interest of 1,704 contracts, indicating that this was fresh buying.

Those puts traded up to $3.30 today, 5 times their purchase price. The stock fell 21.9% in the same time frame, showing how quickly options can far 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.

BOX plummeted 23.32% to $18.45 today. The business-software company reported slower growth than expected after the market closed yesterday.