$CPRI bears see fast gains

Option traders are seeing fast gains on downside positions in Capri (CPRI) today.

Yesterday on Mar. 3, Market Rebellion’s Unusual Activity programs detected the the purchase of 3,000 Weekly $64 puts, expiring next Friday, for $1.89 to $1.97 with shares at $65.27. Volume was clearly above the previous open interest of 29 contracts, indicating that this was a new position.

Those puts traded for as much as $8.45 this session, over 4 times their purchase prices. The stock fell 14.36% in the same time frame, illustrating the kind of leverage that can be achieved quickly 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.

CPRI ended the session down 15.31% to $54.54.