$NCLH bears triple their money overnight

Shares of Norwegian Cruise Line (NCLH) are sinking lower today, delivering a wave of profits to downside option positions opened only a day ago.

Yesterday on Mar. 3, our Unusual Activity Tracking systems found that 5,200 Weekly $18 puts expiring today, were bought for $0.19 to $0.24 with shares at $18.43. This was clearly fresh buying, as volume was well above the strike’s existing open interest of 3,821 contracts.

Today those puts traded for as much as $0.78 today, more than triple their prices. The stock fell 6.62% in the same time, showing how options can far outperform 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.

NCLH ended the day of trading at $17.39, down 6.30% on the session.