$SYMC puts spike threefold

Bearish option traders rang up exponential profits as Symantec (SYMC) fell sharply today.

On July 11, Investitute’s market scanners flagged the purchase of 3,000 August $23 puts for $0.46 as part of a bearish roll with shares at $25.49. Open interest in the strike was only 960 contracts before the trade occurred, showing that this was a new position.

Those puts traded for as much as $1.80 today, about 4 times their purchase price. The stock fell 14.24% in the same time frame, illustrating how 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.

SYMC is down 12.71% to $22.32 this afternoon. The stock fell after news reports that chip maker Broadcom (AVGO) has pulled out of buyout negotiations with the cybersecurity company.