$XME bears rack up quick gains

Option traders have doubled their money on downside positions in the SPDR S&P Metals and Mining Fund (XME).

On Apr. 22, Market Rebellion’s Unusual Activity programs detected the the purchase of 33,000 May $57 puts for $1.55 to $1.60 above the existing open interest of 491 with shares at $60.00.

Those puts have traded for as much as $3.90 this session, over 12 times their purchase price. The stock fell 8.23% in the same time frame, illustrating the kind of leverage that can be achieved quickly with options.

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.

XME was last down 1.59% to $57.49 today.