Most investors got crushed in Snap
Snap reported sales of $150 million versus a Wall Street consensus of $158 million Wednesday after the close. The social media firm also posted a wider-than-expected loss.
The stock then plummeted as much as 23 percent in trading Thursday.
Jon Najarian, co-founder of the Najarian Family Office, told CNBC in an email that some traders bought a "large" number of put contracts near the close of regular trading and just before Snap released its first-quarter results.
Traders who made these bearish bets essentially doubled their money. Najarian said the May $24.50 puts spiked from $2.75 at
Snap 2-day chart
Puts are options that give the owner the right to sell a stock at a given price within a specific period of time.
"Now, there are two basic reasons that someone buys a put contract; 1) to protect their long position in the equity 2) to bet that the equity may decline. When they scramble into puts in the final 5 minutes of trading, we think that's pretty telling," Najarian said.
"Under normal circumstances, I would have tagged these trades and followed into puts of SNAP and subsequently, reaped a big windfall. Sadly, last night the paper came so late in the session that we didn't participate," the trader added.