By David Russell, reporter at OptionMonster
NEW YORK -- Paychex's (PAYX) quarterly results disappointed investors earlier in the week, and now the bears want revenge.
OptionMonster's tracking programs detected the purchase of about 5,900 October 33 puts for 44 cents to 50 cents. Volume was 11 times open interest in the strike.
Owning puts locks in the price where investors can sell a stock, so the lower it goes, the more the they are worth. These options can be used as insurance policies to protect long positions but are also ideal for outright bearish trades.Paychex shares fell 0.72% to $33.17 Wednesday. The stock gapped lower in the previous session after the company reported a lackluster quarter, with earnings beating expectations by a narrow margin but revenue missing the mark. Given that the stock was near multi-year highs when the news came out, expectations were very optimistic. Based on Wednesday's trades, the bears apparently believe that further selling may now take place. Total option volume was more than 7 times greater than average in the session, with puts accounting for more than 80%. Russell has no positions in PAYX.