$NKLA option bears double money

Nikola (NKLA) bears turned big gains on downside option positions today.

on Jun. 23, Market Rebellion’s Unusual Activity programs detected the the purchase of 4,700 August $18 puts for $2.82 to $3.15 with shares at $18.55. Volume was clearly above the previous open interest of 102 contracts, indicating that this was a new position.

Those puts traded for as much as $6.10 this session, about double their purchase prices. The stock fell 34.66% in the same time frame, a huge move but nothing like that of its 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.

NKLA closed lower on the day by 15.22% at $12.03.