$CVNA bears drive fast profits

Carvana (CVNA) option traders got behind the wheel of bearish positions yesterday and are driving big gains this session.

Yesterday on Apr. 26, Market Rebellion’s Unusual Activity programs found the the purchase of 10,000 Weekly $70 puts for $2.70 to $2.95 as part of a bearish spread and roll above the existing open interest of 518 with shares at $73.52.

Those puts have traded for as much as $7.90 this session, over 2.5 times their purchase prices. The stock fell 12.87% 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.

CVNA was last lower on the day by 6.4% at $65.98.