Option bears rack up profits overnight in $ORCL

Downside option positions are seeing significant overnight gains as Oracle (ORCL) pulls back today.

Yesterday morning on Jun. 15, Market Rebellion’s Unusual Activity Service identified the purchase of 8,500 June $80 puts for $1.17 to $1.34 as part of a bearish spread with shares at $81.65.

Today those puts have already traded up to $3.10 this morning, more than doubling in value. The stock was last down just 5.79% at the same time, showing how quickly options can far outpace moves in 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.

ORCL dropped 5.71% to $76.95 today. The cloud-computing company beat earnings and revenue estimates after the market closed yesterday, but shares fell with disappointing guidance.