Puts triple overnight in $HPE

It took just 24 hours for bearish traders to turn substantial profits in Hewlett Packard Enterprise (HPE).

Just yesterday, our Unusual Activity Tracking systems found that 5,400 Weekly $13 puts expiring Mar. 6, were bought for $0.41 to $0.60 with shares at $13.04. This was clearly fresh buying, as open interest in the strike was only 237 contracts before the session began.

Those puts traded for $1.50 this morning, about 3 times their average purchase price. The stock fell 11.81% at the same time, 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.

HPE was down to a new 52-Week low of $11.43 this morning before pulling back higher to close $12.26 today, still 2.62% lower for the session. The business-software company reported earnings after the closing bell yesterday missing on revenue estimates and meeting earnings expectations.