Continental hits gusher for bears

The plunge in Continental Resources has yield huge returns on downside positions that expired today.

On May 12, Investitute’s scanners detected the purchase of 13,100 June $39 puts for $0.80 to $0.85 with shares at $42.06. pen interest of 163 contracts. Stock 42.06.

Those puts sold for $5.90 today, representing a gain of more than 600 percent. The stock fell 21.4 percent in the same period, a large move but nothing compared to that of the 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.

CLR slipped 0.12 percent to close at $33.01 after hitting another 52-week low of $32.53 earlier in the session. The oil and natural-gas producer has pulled back with other energy names as the price of crude has tumbled, and shares are trading at their lowest level since April 2016.