$CCL put buyers cruise with profits

Bearish Carnival Corp (CCL) option traders who opened downside positions last month are making big profits today.

On May 26, Market Rebellion’s Unusual Option Activity Service found that 3,500 July $10 puts were bought for $0.48 to $0.49 as part of a bearish spread with shares at $13.18.

Those puts have sold for as much as $1.58 today, over 3 times their purchase prices. The stock fell 34.07% in the same time frame, showing how quickly options can far outperform moves in their underlying shares on a relative basis.

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.

CCL was last trading down on the session by 14.94% at $8.80.