By Jud Pyle, CFA, chief investment strategist for ONN.tv

FedEx

(FDX) - Get Report

shares have hovered just under $70 for the last month, but significant put-buying Tuesday suggests at least one investor is looking for further downside.

Nearly 10,500 Oct. 60 puts changed hands yesterday vs. open interest of 4,000 contracts. The Oct. 60 puts have a delta of approximately 20 cents. That means these options should move 20 cents for every dollar move in the underlying stock. FDX shares closed Tuesday up 42 cents at $68.26, and the puts should have dropped approximately 11 cents. These puts actually rose three cents on the day, indicating more buyers than sellers.

The Oct. 60 puts had a volume weighted average price of $1.10 so investors who bought these puts need FDX shares to expire lower than $58.90 to make money. Bearish investors are looking for FDX shares to drop another 14% throughout the next couple of months.

FDX did not announce significant news to catalyze the put-buying we saw, but it is interesting that some investors have a pretty big drop in the stock in sight. Put-buying such as this does not mean investors should clean out their supply of FDX shares. It is noteworthy that at least one investor expressed bearishness or bought puts to hedge a long position in the stock. Remember, it is not necessary for investors to hold options until their expiration date. If FDX shares drop drastically before October expiration, investors should take profits.

Jud Pyle is the chief investment strategist for Options News Network (www.ONN.tv) and the portfolio manager of TheStreet.com Options Alerts. Click here for a free trial for Options Alerts. Mr. Pyle writes regularly about options investing for TheStreet.com.

Jud Pyle, CFA, is the chief investment strategist for Options News Network. Pyle started his career in finance in 1994 as a derivative analyst with SBC Warburg. After four years with Warburg, Pyle joined PEAK6 Investments, L.P., in 1998 as an equity options trader and as chief risk officer. A native of Minneapolis, Pyle received his bachelor's degree in economics and history from Colgate University in 1994. As a trader, Pyle traded on average over 5,000 contracts per day, and over 1.2 million contracts per year. He also built the stock group for all PEAK6 Investments, L.P. hedging, which currently trades on average over 5 million shares per day, and over 1 billion shares per year. Further, from 2004-06, he managed the trading and risk management for PEAK6 Investments L.P.'s lead market-maker operation on the former PCX exchange, which traded more than 10,000 contracts per day. Pyle is the "Mad About Options" resident expert. He is also a regular contributor to "Options Physics."