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Option Bears are Targeting Zimmer

Wednesday, 5 Oct 2011 | 8:07 AM ET

Medical device maker Zimmer drew some attention from the bears yesterday.

Shortly after the opening bell, OptionMonster's real-time systems detected the purchase of more than 2,700 October 45 puts for $0.65. The open interest was just 96 contracts, so this was new positioning.

ZMH rose 0.82 percent yesterday to close at $51.52. Shares have been drifting downward since the spring and are still just above their mid-August lows.

For the puts purchased yesterday to turn a profit, the stock would need to drop at least 14 percent by the Oct. 21 expiration.

The company designs and manufactures orthopedic devices, dental implants, and related surgical products. It is scheduled to release earnings results on Oct. 27, less than a week after the options expire.

More than 5,400 puts traded against about 1,000 calls. Total option volume was 4 times greater than average.

Related: Medical Device Shares Rise in Tuesday Trading

—Najarian has no positions in ZMH.

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Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of OptionMonster.com.

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