$NYCB option bears bank big profits

Bearish option traders are banking profits in downside positions on New York Community Bancorp, Inc. (NYCB).

On Feb. 6, Market Rebellion’s Unusual Option Activity Service found that 3,000 March $4 puts were bought for $0.70 with shares at $4.69.

Those puts have traded up to $2.22 this session, a 217.14% return, while the stock declined 59.49% 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.

NYCB was last down 42.24% at $1.86.