Puts fly as Bristow loses altitude

Poor quarterly results from helicopter company Bristow Group has translated to strong gains for bearish option traders.

Back on March 6, Investitute’s proprietary programs found that 3,170 June $12.50 puts were purchased for $1.20 as part of bearish roll with shares at $14.76. Open interest in the strike was a mere 61 contracts before the trade occurred, showing that this was a new position.

Those puts ended today’s session listed at $5.25, a profit of more than 330 percent. The stock lost 50 percent in the same period, a steep move but still far less than the relative gain in 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.

BRS fell 3.16 percent to close at $7.36 today after dipping to a multi-year low of $7.16 in the morning. The company, which provides helicopter service to offshore energy drillers, gapped down from above $14.50 on Wednesday morning after missing earnings estimates and giving disappointing guidance.