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Bears returning to Intrepid Potash

David Russell (david.russell@optionmonster.com)

Intrepid Potash has tried to rebound from a summer selloff, but the bears aren't going away.

optionMONSTER's Depth Charge monitoring program detected the purchase of more than 1,700 January 2015 10 puts for $0.80 and $0.85. Almost 2,000 June 12 puts were bought around the same time for $0.75. Volume was more than 26 times open interest at each strike, indicating that new positions were initiated.

These puts lock in the price where a stock can be sold, letting investors hedge long bets or speculate on a drop. (See our Education section)

IPI fell 2.12 percent to $15.25 on Friday, bucking a 1 percent rally in the broader market. The fertilizer stock gapped violently lower in July along with others in the industry after the breakup of a Russian potash cartel threatened to send prices tumbling.

The stock dropped as low as $10.60 on that news and rebounded all the way back above $17.50 last month. But then it hit resistance at its 200-day moving average and has been falling once again. That could make some chart watchers expect the longer-term downtrend to continue.

Total option volume was 7 times greater than average on Friday, according to the Depth Charge. Puts outnumbered calls by a bearish 45-to-1 ratio.

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