$ODFL puts deliver for bears

Option traders turned major profits today in downside positions opened in Old Dominion Freight Line after its earnings report.

On Apr. 25, Investitute’s tracking systems detected the purchase of 2,500 May $155 puts for $1.55 to $1.61, as part of a complex bearish spread, with shares at $154.66. This was clearly a new position, as the volume from that single trade was well above the strike’s previous open interest of 125 contracts.

Those puts closed marked at $6.30 today, nearly quadruple their purchase price. The stock fell 3.48% in the same time frame, 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.

ODFL dropped to $145.60 in early trade as an intraday low but pulled back higher to close down by 0.34% at $149.28 today. Shares of the truck load shipping company have fallen since quarterly earnings results were released before the opening bell on April 25.