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Bears take aim at Weyerhaeuser

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Weyerhaeuser is drawing bearish option activity ahead of the lumber company's earnings report in less than two weeks.

About 4,000 May 28 puts were purchased mostly for $0.85 and $0.90 on Friday, according to optionMONSTER's Depth Charge tracking system. This represents fresh buying, as the volume was far above the strike's previous open interest of just 456 contracts.

The traders are apparently looking for WY to continue falling through mid-May. The puts are likely outright bearish bets instead of protective hedges because these contracts are in the money , but they could expire worthless if shares rebound and rally. (See our Education section)

WY fell 1.67 percent to close at $27.72 of Friday. The stock has been dropping since early April after failing to break through its 50-day moving average near the $30 level. The company is scheduled to announce first-quarter results on April 25 before the market opens.

Total option volume in the name was more than triple its daily average for the last month. Overall puts outnumbered calls by about 14 to 1, a reflection of the session's bearish sentiment.

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