$GE put prices spiking fivefold

Bearish option traders continue to reap big gains from the slide in General Electric.

On Oct. 26, Investitute’s tracking systems detected the purchase of 146,500 January $11 puts in one print for $0.80 as part of a bearish spread with shares at $11.31, apparently rolled down from a trade cited by Investitute co-founder Pete Najarian on Oct. 18. This was clearly a new position, as volume was above the strike’s previous open interest.

Those puts traded for $4.13 this morning, more than 5 times their purchase price. The stock plunged 39.26% in the same time period, a huge move but still nowhere near that of its options on a relative basis. It was the second winning put trade in GE 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.

GE was down 1.14% today to close at $6.93. The struggling industrial giant has seen its share price cut in half since naming a new CEO in early October.