Bearish option traders are marking gains in downside positions on Petco Health and Wellness Company Inc (WOOF).
On May 22, Market Rebellion’s Unusual Option Activity Service found that 3,500 June $10 puts were bought for $0.55 to $0.60 above the existing open interest of 859 contracts with shares at $10.13.
Those puts traded up to $2.42 this session, a 303.33% return, while the stock declined 25.37% 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.
WOOF was last down 17.94% at $8.35.
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