Option bears $DASH for gains

Option traders are making exponential gains on bearish positions opened in DoorDash (DASH) last week.

On Apr. 30, Market Rebellion’s Unusual Activity programs flagged the the purchase of 2,500 Weekly $146 puts, expiring this Friday, May 7, for $4.70 as part of a bearish spread and roll with shares at $150.00. Volume was clearly above the previous open interest of 500 contracts, indicating that this was a new position.

Those puts have traded for as much as $17.77 this session, over triple their purchase price. The stock fell 14.45% 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.

DASH was last down by 6.83% to $125.78 in late-session trade. The online food ordering company is scheduled to report earnings after the market closes on May 13.