Skepticism Grows Toward Silver Standard Resources Inc.

Puts were popular yesterday on Silver Standard Resources Inc. (SSRI), as traders reacted to the company's third-quarter earnings results. During the course of the session, speculators on the International Securities Exchange (ISE) bought to open 2,005 puts on SSRI, compared to just 74 calls.

The bulk of this bearish activity was focused around SSRI's January 2010 19 put, where a block of 2,000 contracts traded at the ask price of $2.05 shortly after the opening bell. Implied volatility rose 1.5% following the transaction, and open interest at this strike jumped overnight from 401 contracts to 2,401 -- confirming the addition of new long puts here on Thursday.

In fact, this option continues to draw a crowd today, with 2,605 contracts changing hands so far. With volume outstripping open interest, it seems likely that new positions are being added at the January 19 put again today.

The current trend toward puts over calls is nothing new for SSRI, which has racked up a 10-day ISE put/call volume ratio of 1.77. This ratio ranks in the 77th annual percentile, confirming that traders have a greater appetite than usual for bearish bets on the stock.

With SSRI trading near $19.15, those January-dated puts are currently at the money. The shares have meandered in a primarily sideways direction in recent months, but the stock is currently maintaining support from its gently rising 50-week moving average.

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