By Jon "DRJ" Najarian, co-founder of OptionMonster.

Darden Restaurants ( DRI) is drawing bearish options activity ahead of the company's earnings report on March 17.

Put activity for Darden has averaged 860 contracts a day over the last month, but more than 7,400 puts traded by Tuesday afternoon alone. With shares holding just above $25, about 5,100 puts traded at the March 20 strike against open interest of only 651 contracts.

Of particular note was one large player who bought 2,614 of those puts for 45 cents and another 1,171 for 40 cents, according to OptionMonster's tracking systems. Trading also has been active at the March 22.50 strike, where 1,600 puts changed hands against open interest of 1,050 contracts.

Shares of Darden, which operates restaurant chains such as Red Lobster and Olive Garden, have nearly doubled in the last three months. But the company is vulnerable to the effects of the poor economy, as are so many other restaurant companies, and some traders may think that its stock is due for a pullback.
At the time of publication, Najarian had no positions in any stocks mentioned.

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