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Large bear sitting on Tempur-Pedic

David Russell (david.russell@optionmonster.com)

One big trader apparently thinks that Tempur-Pedic might fall out of bed again.

The mattress maker lost three-quarters of its value in a two-month period last year. It's been rebounding since, more than doubling from those levels, but now the bears are back.

optionMONSTER's Depth Charge monitoring program detected the purchase of about 5,750 April 46 puts for $2.15 and the sale of a matching number of April 42 puts for $0.70. Volume was more than 16 times the open interest at each strike, indicating that new positions were implemented.

The trade cost $1.45 to open and will earn a maximum profit of 176 percent if the stock closes at or below $42 on expiration. (See our Education section for more on the strategy, which is known as a bearish put spread because it leverages a move between two prices.)

TPX rose 1.04 percent to $46.49 yesterday but has spent most of the month parked around the same level where it paused last May during its big selloff. That could be leading some chart watchers to believe that shares will hit resistance and roll over.

The timing of the next earnings release hasn't been announced yet, but last year it occurred on April 19--the same day the options bought yesterday expire this year--so they could move on the news.

More than 13,300 contracts changed hands in the session, 5 times greater than average. Puts outnumbered calls by 15 to 1.

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