$COF bears find big gains in their wallet

It has taken less than a week for option traders to double their money on bearish positions in Capital One Financial.

On Monday, Investitute’s market scanners identified the purchase of 2,300 August $83.50 puts mostly for $0.37 with shares at $84.45. Volume was well above the strike’s open interest of 1,996 contracts, indicating that this was new positioning.

Today those calls traded up to $0.72, doubling in value just four sessions later. The stock was down just 1.61 percent at the same time, underscoring the kind of leverage that can be achieved with options.

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.

COF was down 2.18 percent today to close at $81.99. The credit-card company gapped up more than $5 on strong quarterly results July 20 but has since given back most of those gains.