By Jud Pyle, CFA, chief investment strategist for the Options News Network

Package delivery company


(FDX) - Get FedEx Corporation Report

had disappointing revenue numbers in the fourth quarter, resulting in heavy put-buying among bearish investors right out of the gate today. Ahead of today's open, FDX said earnings per share topped the Street's consensus view, but revenue dropped by more than 20% on a year-over-year basis. The company also issued a downside-guidance for the first quarter.

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Looking at the Oct. 40-50 put spread, one investor bought 10,000 of these spreads for $3.55 per spread on the day The Oct. 40 puts are home to current open interest of 1,671, while the Oct. 50 puts are home to current open interest of 1,633. The Oct. 40 puts are currently trading down five cents and the Oct. 50 puts have dropped 15 cents on the day as of 12:30 p.m. EDT.

FedEx shares are currently down 43 cents to $50.99 a share, but they have rallied back from morning lows of $49.84. The stock is up about 50% since reaching a closing 52-week low of $34.28 on March 9.

Normal daily options volume in FedEx is approximately 14,000 contracts across all strikes. At midday, about 34,000 options contracts had changed hands on the stock today, with the bulk of the volume concentrated at October put strikes.

Investors need FedEx shares to expire lower than $46.45 (the higher strike price minus the premium paid for the spread) come October expiration to make money. On the heels of FedEx's lackluster earnings, bearish investors could be betting that FedEx shares will drop throughout the next few months before any potential upswing.

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

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."