$LAZR bears aim for profits

Option traders are aiming for big profits on downside positions in Luminar Technologies (LAZR) today.

On Apr. 7, Market Rebellion’s Unusual Activity tracking systems detected the purchase of 4,800 June $25 puts for $4.70 to $5.00 with shares at $23.43. Volume was well above the strike’s previous open interest of 205 contracts, showing that this was fresh interest.

Those puts have traded up to $9.70 today, about double their purchase prices. The stock declined 31.5% in the same time period, a large move but nowhere near that of its options 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.

LAZR closed down 2.43% at $16.43 today. The LIDAR sensor maker was initiated with a $23 price target and Neutral rating this morning at BofA.