$NKLA option bears turn fast profits

Nikola (NKLA) bears are turning big gains on downside option positions today.

On Sep. 14, Market Rebellion’s Unusual Option Activity Service found that 35,000 Weekly $5 puts, expiring this Friday, were bought for $0.18 as part of a complex bearish spread and roll with shares at $5.31. This was clearly fresh buying, as open interest in the contract was just 619 before the activity appeared.

Those puts traded for as much as $0.53 this session, nearly 3 times their purchase price. The stock fell 14.69% in the same time frame, illustrating the kind of leverage that can be achieved quickly 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.

NKLA ended the session down by 0.44% at $4.56.