Puts turn big profits in $CC

Bearish traders made some big profits in Chemours (CC) today.

On May. 21, Investitute’s proprietary programs found that 5,000 October $20 puts were purchased as part of a bearish spread for $1.52 to $1.53 with shares at $24.03. This was clearly a new position, as open interest in the strike was a mere 572 positions before that session began.

Those puts have traded for $6.82 today, nearly 4.5 times their purchase prices. The stock fell 43.99% in the same time frame, showing 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.

CC is down 8.68% currently trading for $13.26, just above its fresh 52-Week low of $13.25, also printed today. This morning, RBC Captial downgraded the chemical company to Sector Perform from Outperform and cut its price target to $16 from $32.