Put prices fly higher in $AER

Bearish option traders are flying with big gains in AerCap Holdings N.V. (AER) opened ahead of the weekend.

On Feb. 25, Market Rebellion’s Unusual Activity programs detected the the purchase of 10,400 March $57.50 puts for $1.05 to $1.15 with shares at $62.79. Volume was clearly above the previous open interest of 332 contracts, indicating that this was a new position.

Those puts have traded for as much as $6.42 this morning, over 5.5 times their purchase prices. The stock fell 15.62% 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.

AER was last down on the session by 10.81% at $56.02.