Put buyers score fast profits in $CRM

Bearish option traders are scoring fast profits in Salesforce.com (CRM) today.

Yesterday on Nov. 30, Market Rebellion’s Unusual Activity Service found that 5,541 January $280 puts were bought for $11.13 to $12.55 above the existing open interest of just 2,457 contracts with shares at $286.97.

Those puts have traded for as much as $27.00 today, over 2 times their purchase prices. The stock declined 10.21% in the same time frame, showing how quickly options can far outperform moves in their underlying shares 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.

CRM was last lower by 2.07% to $259.27 in afternoon trading.