Put prices soar sixfold in $INTC

Bearish option traders have collected major profits as Intel has fallen.

On June 21, Investitute’s proprietary programs found that 10,000 Weekly $50 puts expiring this Friday would purchased for $0.19 with shares at $52.67. This was clearly fresh buying, as open interest in the strike was only 691 contracts before the activity appeared.

Those puts sold for $1.25 today, more than 6.5 times their purchase price. The stock fell 7.3% in the same time frame, illustrating how options can far outperform moves in their underlying shares.

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.

INTC was down 1.83% to $48.76 today. Shares have been dropping since Brian Krzanich resigned as the chip maker’s CEO last Thursday, when those puts were bought.