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Bears want to savage InvenSense

David Russell (david.russell@optionmonster.com)

InvenSense is trying to advance, but the bears have other ideas.

optionMONSTER's Depth Charge monitoring system detected the purchase of more than 2,200 October 12.50 puts, most of which priced for $1.05. Volume was 20 times previous open interest at the strike.

INVN fell 3.12 percent to $13.02 yesterday. The supplier of chips for motion-sensing devices traded around about $8 in late 2011, rallied to $22 by March and then crashed back below $10. It's been rebounding since, and has now returned to a level that was support earlier in the year. Some chart watchers may now expect resistance, which would explain Monday's put buying.

Those contracts move in the opposite direction as INVN shares, and will appreciate rapidly in the event of a selloff. A drop of less than 12 percent will cause them to double, while a 20 percent decline would triple the trader's investment. See our Education Section for more on how to generate leverage using options.

Some 3,300 contracts traded in the session, more than quadruple the normal daily average. Puts accounted for more than four-fifths of the total.

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