Puts post large gains as SeaWorld sinks

Seas810

Bearish option trades are profiting from SeaWorld Entertainment’s losses.

On June 28, Investitute’s scanners showed that 3,000 August $17 puts were purchased for $1.35 to $1.45 with shares at $16.20. This was a new position, as there was no open interest before the trade occurred.

Today those puts were listed for $4.45, more than tripling in value. The stock fell 21.7 percent in the same time, illustrating the kind of leverage that can be obtained through 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.

SEAS was down 0.78 percent to $12.68 today. The theme-park operator reported an unexpected second-quarter loss and missed revenue forecasts on Tuesday morning.

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Mike Yamamoto | Investitute

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