By David Russell, reporter at OptionMonster

NEW YORK ( OptionMonster) -- Option traders are reversing direction on MetroPCS Communications ( PCS) to bearish from bullish.

Last week, OptionMonster's tracking systems detected bullish call-buying in the pre-paid wireless company. It ripped higher in subsequent sessions and those contracts, the January 7.50 calls, more than doubled.

Wednesday the opposite occurred as traders purchased almost 8,000 January 10 puts, looking for downside. They initially paid $1.15 and $1.20 but later as much as $1.35 after the shares edged lower.

MetroPCS ended the session down 6.39% at $8.79 after slamming into resistance at its 100-day moving average. The company is still licking its wounds after customer defections caused earnings to miss estimates in August and November.

Calls fix the price an investor must pay to buy a stock, but they are much cheaper than the shares because they represent only the right to buy them. Puts are just the opposite, locking in a minimum exit price and representing the right to sell the shares for a given amount, no matter how low they go.

Investors use these instruments to manage risk and to speculate on price changes. They can provide significant leverage if a stock moves in the right direction but also end up worthless if it doesn't.

Overall option volume in the name was six times greater than average Wednesday, with puts accounting for 88% of the volume.

Russell has no positions in PCS.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.