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Bears target Tellabs after recent jump

David Russell (david.russell@optionmonster.com)

Tellabs popped last week, but one trader apparently thinks that what goes up may come down.

optionMONSTER's Depth Charge tracking program detected the purchase of about 1,800 December 3 puts for $0.05 against open interest of 882 contracts. Those puts lock in a selling price for the stock, so will appreciate in the event of a decline.

TLAB is flat at $3.37 in early afternoon trading but is up 17 percent in the last week. Most of the gains occurred on Friday, when the company announced that it would pay a giant special dividend of $1 per share.

Before that news came out, sentiment had been negative in the maker of telecom gear, which had been dropping since mid-2010 amid a stream of poor financial results. Today's trader apparently thinks the longer-term downtrend will continue after the recent pop.

Total option volume is quadruple the daily average in the name so far today, according to the Depth Charge.

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