Bearish trade before Equinix earnings

optionMONSTER

The tone is cautious before Equinix issues its quarterly report this week.

optionMONSTER's Depth Charge monitoring program detected the purchase of some 3,200 May 200 puts for $3.40 to $3.86. Volume was more than 10 times open interest at the strike, indicating that new positions are being opened.

Puts lock in the price where shares can be sold in the cloud-computing stock. That gives them leverage to the downside, letting traders hedge long positions or speculate on a drop. (See our Education section)

EQIX is up 0.27 percent to $210.72 in morning trading. It doubled between the start of 2012 and early this year but has been moving sideways since. That could be leading some chart watchers to believe that it's at risk of a pullback and help explain today's put buying.

First-quarter earnings will be released Wednesday afternoon. It's beaten quarterly estimates for at least the last year.

Total option volume is 6 times greater than average so far today, according to the Depth Charge. Puts account for more than four-fifths of the total.

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