Put buyers find profits in $SNAP

Bearish option traders are cashing in quick overnight profits on Snap (SNAP) puts today.

Yesterday on Jan. 20, Market Rebellion’s Unusual Activity tracking systems detected the purchase of 19,500 March $33 puts, as part of a bearish spread, for $2.33 to $2.37 with shares at $37.05. Volume was well above the strike’s previous open interest of 155 contracts, showing that this was fresh interest.

Those puts have traded up to $4.53 today, nearly double their purchase prices. The stock declined 13.5% 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.

SNAP was last down by 7.4% at $32.40 in afternoon trade.