Options Traders Target Best Buy Stock

Best Buy is trading lower Tuesday after drawing huge put activity right out of the gate this morning, a month before the retail chain reports quarterly earnings.

Options volume in the first hour of trading matched the April average for a full session, so I'll call it hot paper. Traders concentrated on the June 35 strike price, which saw nearly 6,500 puts change hands against open interest of 4,000 contracts, according to OptionMonster's real-time tracking systems.

This does not appear to be a roll from expiring May contracts, as total put volume for the month is maybe 1,100 and spread across various strikes.

BBY shares are down 4.7 percent to $36.37 in midday trading. Today's options activity is apparently betting that the stock will fall to $35 by the middle of next month when the contracts expire, a few days after the company announces quarterly earnings results on June 16.

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Jon 'DRJ' Najarian is a professional investor, CNBC contributor, and cofounder of OptionMonster.com.