$X bears triple their money

Downside option positions racked up large profits today as U.S. Steel hit new lows.

On Nov. 8, Investitute’s proprietary programs showed that 3,000 Weekly $35 puts expiring on Dec. 14 were purchased for $0.33 to $0.35 with shares at $28.80. This was clearly fresh buying, as open interest in the strike was only 130 contracts before the trades occurred.

Those puts sold for $0.98 this afternoon, about 3 times their purchase prices. The stock fell 13.16% in the same time period, underscoring 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.

X was down 2.8% today to close at $25 even. The steel maker reached a new 52-week low late this afternoon amid both tariff and demand concerns from China.