Options bears circled the wagons around Bed Bath & Beyond Inc. (NASDAQ:BBBY - 60.52) on Wednesday, with put volume rising more than five times the expected level. BBBY saw 8,168 puts and 1,072 calls change hands, versus its average daily volume of 1,400 puts and roughly 2,200 calls.

Attracting notable attention were BBBY's weekly 60 puts, where 5,228 contracts were exchanged. Several large blocks traded at or near the ask price, and open interest increased overnight by almost 4,500 contracts, pointing to buy-to-open activity. By purchasing these puts, traders believe that the security will cower below the $60 level by Friday's close.

Pessimism has been on the rise recently for BBBY, as evidenced by its 10-day put/call volume ratio of 1.81 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio ranks above 86% of all other readings taken during the past year, suggesting that options traders have bought bearish bets over bullish at a faster pace than usual during the past couple of weeks. Elsewhere, short interest surged by 14% over the most recent reporting period.

The brokerage bunch, however, has an upbeat view of BBBY. There are 14 "strong buys," six "holds," and one "strong sell" rating. Furthermore, the average 12-month price target sits at $75.33, which represents 25% premium to yesterday's close of $60.24. This bullish alignment leaves the door wide open for downgrades and price-target cuts, should BBBY fail to live up to expectations.

The home goods retailer suffered a rather drastic pullback in late June after revealing a weaker-than-projected outlook for its current quarter. Following this news, the shares fell 17.7% from their all-time best of $75.84, drifting below its formerly supportive 200-day moving average, which has reversed roles to act as resistance since then. BBBY is currently trading in the $63-$60 region, and is sitting on a 4% return for 2012. On a relative-strength basis, the security has underperformed the broader S&P 500 Index (SPX) by nearly 20 percentage points during the past 40 sessions.

Just after the opening bell, BBBY is bouncing around the $60 area and is staring up at its downtrending 32-day trendline.