$RUN put prices heat up

Option bears have tripled their money on downside positions in Sunrun (RUN).

On Dec. 14, Market Rebellion’s Unusual Activity Service found that 4,300 January $37 puts were bought for $1.80 to $2.40 as part of a bearish roll above the existing open interest of 1,089 contracts with shares at $39.08.

Those puts traded up to $7.05 this session, about 3 times their average purchase price. The stock declined 20.16% in the same time frame, showing how quickly options can far outperform moves in their underlying shares on a relative basis.

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.

RUN ended the session lower by 8.15% at $31.44 this afternoon.