$AR put buyers turn gains

$AR put buyers turn gains

by

Option traders posted sizable gains in Antero Resources (AR) today as shares traded lower.

On Feb. 15Market Rebellion’s Unusual Option Activity Service found that 5,000 February $27 puts were bought for $0.42 to $0.43 above the existing open interest of 2,556 contracts with shares at $27.91.

Those puts have traded up to $1.78 today, more than 3 times their purchase prices. The stock declined 9.39% 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.

AR settled the session down 8.39% at $25.23.

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