$UNFI puts spike fourfold

Bearish option traders continue to benefit from losses in United Natural Foods.

On Nov. 29, Investitute’s market scanners identified the purchase of 3,000 December $25 puts for $2.90 as part of a bearish roll with shares at $22.86. This was clearly a new position, as open interest in the strike was a mere 124 contracts before that session began.

Those puts ended today’s session marked at $11.90, more than 4 times their purchase price. The stock plummeted 41.25% in the same time frame, a huge move but still far below that of its options on a relative basis. It is the second winning put trade in the name posted on Investitute in the last three sessions.

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 another 2.92% today to close at $13.28. The organic-grocery producer reported disappointing quarterly results last week.