$MU put buyers turn fast gains

Bearish option traders nearly doubled their money as Micron fell today.

On Dec. 6, Investitute’s market scanners identified the purchase of 5,000 January $33 puts for $1.51 as part of a bearish spread. Shares were trading at $36.09 at that time.

Those puts traded for $2.80 today, almost twice their purchase price. The stock fell 12.97% in the same time frame, showing how quickly options can far outperform moves in their underlying shares.

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.

MU dropped 7.92% to $31.41 today. The memory-chip maker missed earnings and sales estimates after the market closed yesterday.