Bearish trading targets JDS Uniphase

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JDS Uniphase is drawing bearish option activity as the stock slips lower.

A trader bought more than 3,200 November 9 puts for the ask price of $0.05 across exchanges in the same second, according to optionMONSTER's Depth Charge system. Open interest in the strike was just 784 contracts at the start of the day, so this is a new position.

The puts were not traded against any shares of the stock that we saw today. The delta is just 0.09, suggesting just a 9 percent probability that those puts will expire in the money .

This could be an cheap bearish play, given the $0.05 option price, or it could be protective hedging on a long position. (See our Education section)

JDSU is down 1.91 percent to $10.25 in early afternoon trading, giving up some of its gains from the previous session. Shares of the telecom-testing equipment maker closed at $9.70 on Wednesday after its earnings report, its lowest since Aug. 2, but then rallied strongly yesterday.

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