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

More than a month before

Best Buy

(BBY) - Get Report

earnings are out, investors are already purchasing protective put options in case the stock gives back some of its recent gains.

Looking at the June 35 puts, we see that more than 10,000 of these contracts have changed hands so far today, according to the Sidewinder report at www.ONN.tv. The bulk of this volume took place during the first couple hours of trading today when an investor bought more than 8,500 June 35 puts for around $2.05 with stock trading near $36.88.

That computes to an implied volatility of 61.4 vs. open interest of 4,000, indicating that the lion's share of Tuesday's volume is likely to translate as new open interest.

Shares of BBY are up more than 100% after hitting a 52-week low of $17.42 on Nov. 20. Analysts estimate that BBY earnings per share will drop to 33 cents in the second quarter after the company reported $2.39 a share last quarter. There do not appear to be any significant headlines today on BBY to justify the stock's 4% drop.

Wednesday at 8:30 a.m. EST, retail sales for April will be announced. Consensus estimates show a 0.1% increase for April after a 1.1% drop in March. In addition, Best Buy said it will cut 1,000 jobs in May, another reason why investors could be preparing for a retail stock pullback. Electronics and appliance stores, such as BBY, accounted for 1,600 jobs lost out of the 46,700 retails jobs lost in April.

Big put-buying activity does not mean investors should run right out and sell their shares. However, it does demonstrate how some investors are buying downside protection in case BBY shares decline further in the next month. BBY earnings are due out on June 16, just a couple of days before options expiration.

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."