$KKR bears triple money

Option traders are logging big profits on downside positions in KKR (KKR) for the second time in three sessions.

On Sept. 27, Market Rebellion’s proprietary programs found that 2,000 Weekly $27 puts expiring on Oct. 11 were bought for $0.40 as part of a bearish roll with shares at $27.83. This was clearly a new position, as open interest in the strike was a mere 20 contracts before the activity appeared.

Those puts traded for as much as $1.20 so far today, 3 times their purchase price. The stock fell 6.25% in the same time frame, showing how quickly options can far outperform moves in their underlying shares on a relative basis.

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.

KKR is down 2.38% to $26.21 in midday trading today. It is the second winning downside trade in the private-equity firm posted on Market Rebellion since Friday.