$UNFI bears post more profits

Option traders scored fourfold gains in United Natural Foods today.

On Oct. 15, Investitute’s proprietary programs flagged the purchase of 4,700 February $30 puts for $4.10 to $4.90 with shares at $26.45. This was clearly a new position, as volume was well above the strike’s open interest before that session began.

Those puts traded up to $19.30 today, about 4 times their average purchase price. The stock plummeted 58.79% in the same time period, a huge move but still nowhere near that of its options on a relative basis. It was the third winning put trade in the name posted on Investitute in a little more than a week.

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.

UNFI was down 0.91% to $10.84 today. The organic-grocery producer, which was acquired by Supervalu earlier this year, declined after disappointing quarterly results earlier this month.