$PXD puts double overnight

Pioneer Natural Resources (PXD) shares are down today and bearish option traders are seeing their put prices elevate.

Yesterday on Jun. 9, Market Rebellion’s Unusual Activity Service found that 2,500 Weekly $172.50 puts, expiring tomorrow, were bought for $3.70 as part of a bearish spread with shares at $169.82. This was clearly fresh buying, as open interest in the strike was just 5 contracts before the activity appeared.

Those puts were last marked for $8.60, more than 2 times their purchase price. The stock dropped 3.59% in the same time frame, showing how quickly options can far outperform moves in the 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.

PXD was last down on the session, lower by 2.4% at $163.73.