$SHEL puts pump profits overnight

Bearish option traders are tripling their money overnight in Shell PL (SHEL) puts this session.

On Jun. 16, Market Rebellion’s Unusual Option Activity Service found that 5,000 June $50 puts, expiring today, were bought for $0.15 to $0.20 with shares at $52.80. This was clearly fresh buying, as open interest in the contract was just 3,801 before the activity appeared.

Those puts traded up to $0.75 this session, over 3 times their purchase prices. The stock fell 6.16% 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.

SHEL was last lower by 4.07% at $50.26.