By David Russell of OptionMonster

NEW YORK -- Himax Technologies (HIMX - Get Report) was a high-flying rock star until March, but things have gotten ugly since then and the bears piled in Tuesday.

OptionMonster's tracking programs detected the purchase of more than 5,000 June 7 puts, with early buyers paying as little as 15 cents to 25 cents. But the stock quickly fell, and those contracts changed hands for as much as 75 cents by the afternoon.

Puts lock in the price where a stock can be sold, so they go up when shares go down. Investors use them to protect long positions or to speculate on a drop, but either way they can generate significant leverage if a move occurs in the right direction, which is what happened Tuesday.

Himax ended the session down 14% at $6.62. It surged from below $2 in late 2012 and above $16 by last March, only to lose momentum and spiral lower since.

Total option volume was 11 times greater than average in the session.

Russell has no positions in HIMX.

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.