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What's behind big put surge in Quanta

David Russell (david.russell@optionmonster.com)

Someone apparently thinks that Quanta Services may be ready to tank.

optionMONSTER's Depth Charge tracking program detected the purchase of almost 10,000 February 28 puts on Friday against previous open interest of 4,072 contracts. Premiums rose from $0.20 to $0.40 as the trades crossed our systems, reflecting a strong buying pattern.

The trader now has the right to sell shares in the construction and engineering company for $28 no matter how far they might fall, potentially providing significant leverage to the downside. He or she may be hedging a long position in the stock or making a bearish speculative bet. (See our Education section)

PWR fell 1.07 percent to $28.66 on Friday but is up 32 percent in the last year--more than twice the twice the return of the broader market in the same period. But shares have been lagging recently, and some investors may fear a wave of selling.

Total option volume was 17 times greater than average on Friday, according to the Depth Charge. Puts accounted for a bearish 85 percent of the total.

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