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Option Bears Put Their Stamp on Pitney Bowes

The bears are betting that Pitney Bowes can go no higher.

OptionMonster's tracking systems detected the purchase of about 6,500 July 17 puts yesterday, most of which priced for $1 to $1.10. Volume was more than twice the open interest in the strike.

The options lock in the price at which investors can sell shares in the company, which makes postage meters and mail handlers. These protective puts are essentially insurance against a sell-off that will increase in value if the stock falls sharply.

Pitney Bowes rose 0.47 percent to $19.32 yesterday, but at one point was up almost 2 percent in the session.

Shares have been nudging slightly higher in recent weeks, but seem to be stalling around its 100-day moving average. That could lead some chart watchers to believe that the stock is ready to push lower. It also posted a lower low in November, while the S&P 500 made a higher low and now seems to be making a lower high, unlike the broader market — other potential bearish signals.

A giant in the world of snail-mail, Pitney Bowes is trying to find new growth areas. Its last two quarterly reports paint that picture, with profit better than expected but revenue light. The next earnings release is scheduled for the afternoon of Feb. 9.

Overall option volume was five times greater than average yesterday, with puts outnumbering calls by 9 to 1.

—Russell has no positions in PBI.

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David Russell is a reporter and writer for OptionMonster.

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