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Bears see quick drop for Kimberly-Clark

David Russell (david.russell@optionmonster.com)

Kimberly-Clark has been hovering after a big rally, and now the bears are stepping in.

optionMONSTER's Depth Charge monitoring system detected the purchase of about 5,000 November 85 puts against open interest of just 1,013 contracts. Most of the large blocks priced for $0.60 to $1.05.

Those contracts lock in the price where investors can sell shares in the consumer-products company at the end of today's session. Given their short lifespan, they're extremely leveraged to selloff over the next few hours. If the stock remains above $85 they will become worthless.

KMB is up 1.23 percent to $84.86 in early afternoon trading. It rallied about 19 percent in the first seven months of 2012 to an all-time high above $88 and has been consolidating since then. Given how much the broader market has fallen recently, some traders may think that the stock is due for a decline as well.

Overall option volume in KMB, whose products include Kleenex and Huggies, is 5 times greater than average so far today. Puts account for more than three-quarters of the total.

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