My information about there being one large seller comes from the fact that, on most of the large size trades, the same brokerage house was on the sell side. That could be one person, or 100 people from the same brokerage house. It really doesn't matter, since their money is being bet on the downside move in the stock.
As far as the "strangle" buyer, yes, if he knew the stock was going to go up, he could simply buy fewer calls to get the same return. However, if he knew there was going to be a surprise in the earnings report, but didn't know which way, positive or negative, the strangle gives him the opportunity to profit from either an up or a down move in the stock, as long as that move is dramatic. There are many types of people who do these types of trades, some are gamblers, some think they know the direction of the stock, and, yes, believe it or not, some are cheaters in that they have some inside person giving them information about the company, before that information is released to the general public. Did you ever notice that in the few days or weeks before a merger announcement, how the volume of the stock of the company that is going to be aquired suddenly jumps for no apparent reason? Did you also ever notice how the options of that company also show dramatic increases in volume for no apparent reason. My point is that, in fact, there is a reason for this unusual activity, these people have non-public information. Since it is something that is very difficult to prove, most of the time these cheaters get away with it, and make large profits because of it. It's like whisper down the lane, in that one guy gets the information, buys the stock or options, and then tells a few close friends the information. They then do the same thing, and the geometric progression continues and the glaring evidence of this type of activity is the unusual volume in both the stock and options. If you look in Investor's Business Daily, they report unusual activity in a stock by printing it in boldface type.
The guy who did the strangle might have been the same guy who sold the stock down, but if that were true, wouldn't you expect him to buy the puts while the stock is high, (and before he starts selling the stock down), and then buy the calls as he finishes selling his stock (while the stock price is low). In this way, he would put the strangle on for a much cheaper price, and since money is the driving force behind this game we call a stock market, that is what I would expect him to do, regardless of how he eventually decides to get out of the position.
Hope I didn't bore you with too many details. Good luck.
By the way, the earnings have come out, and were reported as $.34 per share but there is a $.05 charge in there. We'll have to wait and see what happens to the stock tomorrow. I wonder if the put players and stock sellers only heard the part about the earnings being $.34, which would be much less than the $.40 that was projected? If that is the case, they will get their just reward!