$KWEB bears score a quick winner

Bearish option traders have scored a quick winner in downside positions on the KraneShares CSI China Internet ETF (KWEB) today.

Just yesterday on Sep. 2, Market Rebellion’s tracking systems detected the purchase of 7,000 September $69 puts in three prints across the session for $1.06 to $1.18 with shares at $72.19. These were clearly new positions as open interest in the strike was only 56 contracts before the activity appeared.

Those puts have traded for as much as $2.27 so far today, or about double their purchase prices. The stock fell 4.52% in the same time frame, 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.

KWEB is currently lower by 4.37% at $69.41 on the day. The exchange-traded fund, which tracks a basket of Chinese internet equities, has fallen from making a new 52-Week high yesterday as the broader market pauses.