Patient $MRNA put buyers rewarded

Option traders are posting big gains in downside positions on Moderna (MRNA) today.

On Jul. 1, Market Rebellion’s Unusual Option Activity Service found that 2,100 January $105 puts were bought for $10.30 to $11.15 with shares at $119.39. This was clearly fresh buying, as open interest in the contract was just 974 before the activity appeared.

Those puts have traded for as much as $29.45 this session, a 164.13% return, while the stock fell 33.39% in the same time frame, illustrating the kind of leverage that can be achieved quickly 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.

MRNA ended the session higher by 3.49% to $79.28.