U.S. Markets closed

Downside positions target Adtran

David Russell (david.russell@optionmonster.com)

Adtran has been falling for the last two years, and the momentum bears are coming back.

optionMONSTER's Depth Charge monitoring program detected the purchase of about 1,500 March 22 puts for $1.30 to $1.50. Volume was almost quadruple previous open interest at the strike.

Those contracts lock in the price where investors can sell shares of the networking company, no matter how far they decline. Puts move in the opposite direction to the share price, so they will leverage a move to the downside with limited risk. (See our Education section)

ADTN fell 1.89 percent to $20.74 yesterday. It attempted to rally between October and February but hit resistance at its 200-day moving average and has been declining since. The company's last quarterly report was mixed, with profit better than expected but revenue declining more than forecast.

Total option volume was 7 times greater than average in the name, according to the Depth Charge. Puts outnumbered calls by a bearish 16-to-1 ratio.

More From optionMONSTER