$GE puts continue to work

It took just six sessions for option traders to quadruple their money in downside positions in General Electric.

On April 3, Investitute’s market scanners found that 9,000 Weekly $10 puts expiring on April 12 were bought for $0.20 as part of a bearish roll with shares at $10.03. Open interest in the strike was only 7,349 contracts before that session began, showing that this was a new position.

Those puts traded for as much as $0.91 today, more than 4.5 times their purchase price. The stock fell 9.37% in the same time frame, illustrating how quickly options can far outperform moves in their underlying shares on a relative basis.

It is the fourth winning bearish trade in the name posted on Investitute in the last month.

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 0.65% to $9.16 today. The industrial giant’s shares traded weaker after JP Morgan analyst Stephen Tusa downgraded the company to “underweight” from “neutral”  Tuesday morning.