Bears plug into Polypore before earnings

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One big investor remains negative toward Polypore as earnings approach.

optionMONSTER's Depth Charge tracking system detected the purchase of 2,500 August 35 puts for $2.60 and the sale of 2,476 September 37.50 puts for $4.90. Volume was below open interest in the September options but not the August contracts, which suggests that an existing position was closed and rolled to the lower strike.

One unusual thing about the transaction is that the trader moved the position from the longer-dated contracts to the closer month. This reflects a belief that a big move is more likely in the near term and appears to focus on the company's quarterly report after the bell next Tuesday, July 31.

Earnings at the company, whose filtration technology is used to make batteries and medical devices, have beaten estimates by smaller margins in recent quarters. Revenue has also weakened.

PPO enjoyed a huge rally between early 2010 and mid-2011, climbing from around $12 to above $70. The stock has lost about half its value since then and is now parked near its 52-week lows. Shares rose 0.93 percent yesterday to close at $35.94.

Overall option volume in PPO was 10 times greater than average, with puts outnumbering calls by 18 to 1.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Options

Referenced Stocks: PPO

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