$MRVL bears make quick gains overnight

Bearish option traders made some quick gains in Marvell Technology (MRVL) today on downside positions opened Thursday.

Minutes before yesterday’s closing bell, Investitute’s tracking systems showed that 3,100 Weekly $24 puts expiring today, June 14, were bought from $0.08 to $0.13 with shares at $24.29. This was clearly a new position, as open interest in the strike was just 1,225 contracts before that session began.

Those puts traded for as much as $0.50 this morning, 5 times their average purchase price. The stock fell 3.13% 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.

MRVL made an opening low of $23.43 this morning before pulling up to close at $23.83 today, still down 1.77% for the session. The chip company fell, alongside others in its sector, after Broadcom (AVGO) reported earnings after the closing bell yesterday where it missed on revenues and lowered its fiscal year outlook.