Put buyers rack up some mileage in $HTZ

Option traders have tripled their money in bearish positions on Hertz (HTZ).

On Apr. 9, Market Rebellion’s Unusual Tracking Systems detected the purchase of 2,900 May $5 puts for $0.60 to $0.65 with shares at $6.55. These were clearly new positions, as open interest in the strike before the trade occurred was only 858 contracts.

Today those puts traded for $2.25, more than 3 times their purchase prices. The stock fell 54.66% in the same time, a big move but one that is still well below that of its 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.

HTZ was down 2.99% to close at $2.92 today. The automobial rental company’s shares have traded lower since Monday afternoon when it was reported by the Wall Street Journal that the company had tapped another restructuring advisor for its planned bankruptcy.