$KRE bears score 10-fold profit

Option traders posted exponential gains on downside positions in the SPDR S&P Regional Banking Fund that expired this afternoon.

Back on Aug. 22, Investitute’s tracking systems detected the purchase of 6,858 December $61 puts in one print $1.55 with shares at $64.17. This was clearly a new position, as open interest in the strike was only 774 contracts before that session began.

Those puts traded for $15.35 today, about 10 times their purchase price. The stock fell 28.86% in the same time period, a large move but nowhere near that of its 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.

KRE was down 1.49% to $45.07 today. The exchange-traded fund has fallen along with the rest of the financial sector in recent months.