Bearish Carnival Corp (CCL) option traders who opened downside positions just over a week ago are making gains today.
On Nov. 19, Market Rebellion’s Unusual Activity Service found that 10,000 Weekly $19 puts, expiring this Friday, were bought for $0.33 to $0.36 above the existing open interest of just 1,517 contracts with shares at $20.43.
Those puts traded for as much as $1.46 today, over 4 times their purchase prices. The stock declined 13.12% in the same time frame, showing how quickly options can far outperform moves in their underlying shares 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.
CCL was last higher on the session by 1.39% at $18.20.