$ALB put prices rise

Option traders are scoring in bearish positions opened on Albemarle (ALB).

On Feb. 18, Market Rebellion’s Unusual Option Activity Service found that 9,000 June $70 puts were bought for $3.98 to $3.99 with shares at $82.50. This was clearly fresh buying, as the open interest in the contract before the activity appeared was just 2,107.

Those puts have traded up to $19.80 this session, a 396.24% return, while the stock declined 36.82% 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.

ALB was last down on the day by 11.94% to $51.16.