Option traders posted sizable gains in Antero Resources (AR) today as shares traded lower.
On Feb. 15, Market 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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