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Bears looking for more downside in Riverbed

David Russell (david.russell@optionmonster.com)

Riverbed Technology plunged last month, and now the bears are back.

optionMONSTER's Depth Charge monitoring program detected the purchase of 2,500 December 18 puts for $1.20 and the sale of 1,169 December 20 puts for $2.17. Volume was below open interest at the higher strike, which indicates an existing position was rolled lower.

Puts lock in the price where a stock can be sold, letting investors hedge long positions or speculate on a drop. They can also generate significant leverage if shares move in the right direction. (See our Education section.)

Thursday's activity was especially bearish because the investor more than doubled the number of contracts owned. He or she probably entered the session with a profitable trade in the December 20s and now expects an acceleration to the downside.

RVBD rose 0.44 percent to $18.34 yesterday, but has lost 11 percent of its value since the beginning of last month. Most of that drop came after the IT company lowered guidance on July 14.

Overall option volume was 6 times greater than average in the session, with puts accounting for a bearish 81 percent of the total.

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