Bears print money with $DDD losses

Dismal quarterly results by 3-D Systems translated to major gains for downside positions today.

Back on June 20, Investitute’s proprietary programs cited the purchase of 4,000 January $20 puts in one print for $2.46 with shares at $21.79. This was clearly a new position, as volume was well above the strike’s open interest.

Today those puts sold for $10.80, more than 4 times their purchase price. The stock has plummeted 57.7 percent in the same time period, a huge move but one that still pales in comparison to that of the options. It was the second winning put trade in the name posted on Investitute in the last three weeks.

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.

DDD plummeted 23.67 percent today to close at $9.45. The 3-D printing company badly missed earnings expectations and withdrew its full-year guidance after yesterday’s close.