$TSLA bears double their money

Option traders turned major profits today in downside positions opened in Tesla.

On Dec. 7, Investitute’s tracking systems detected the purchase of 10,000 January 280 puts for $4.75 in one print as part of a bearish roll with shares at $374.24. This was clearly a new position, as its volume was well above the strike’s previous open interest of 8,294 contracts.

Those puts traded up to $10.05 today, more than double their purchase price. The stock fell 20.1% in the same time frame, a large move but nowhere near that of its options 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.

TSLA dropped 6.81% to $310.12 today. Shares fell after the electric-car maker missed delivery estimates and lowered prices.