$F puts prices triple in a few hours

Option traders who opened bearish positions in Ford early this morning were collecting substantial profits by the afternoon.

About half an hour after the opening bell, Investitute’s market scanners found that 2,500 Weekly $11 puts expiring this Friday were purchased for $0.12 and $0.13 with shares at $11.05. Volume was well above the strike’s open interest of 1,810 contracts, indicating that this was fresh buying.

Those puts traded for $0.34 today, nearly 3 times their original price. The stock fell 3.1% at the same time, illustrating the kind of leverage that can be achieved 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.

F was down 1.99% to close at $10.86 this afternoon. Ford and General Motors fared better than most other industries in today’s market decline amid speculation that the auto makers benefited from the drop in Tesla’s stock.