The shares of Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP - 19.96) are swimming in red ink at midday, but it looks like the options crowd may be gambling on a short-term rebound. In afternoon action, the Internet travel issue has seen about 21,000 calls cross the tape -- roughly 27 times its average intraday call volume, and nearly three times the number of CTRP puts traded thus far.

About half of the action has centered on the March 26 call, which has seen close to 10,800 contracts change hands on open interest of fewer than 7,100 contracts, pointing to an influx of new initiations. What's more, 99% of the back-month calls have crossed at the ask price, suggesting they were bought.

By purchasing the out-of-the-money calls to open, the buyers have one of two motives: to profit from a bounce on the charts, or to "insure" a short stock position. In the case of the former, the buyers will profit if CTRP reclaims the $26.20 level (strike plus volume-weighted average price of $0.20) by March expiration. In the case of the latter, the short sellers are locking in an appealing price at which to repurchase their shorted shares, should CTRP stage a notable rebound. In either case, the maximum risk on the call purchase is limited to the initial premium paid.

Speaking of short interest, CTRP skeptics upped their bearish positions by 4.9% during the most recent reporting period. Now, about 17.6% of the stock's total available float is dedicated to short interest, representing more than 11 days' worth of pent-up buying demand, at CTRP's average pace of trading.

However, those shorts are likely cheering today, with CTRP down 12% to hover just shy of the $20 marker. According to Chinese media outlets, the company is offering rebate discounts for air fares, which could hinder Ctrip's margins. As such, the stock is in danger of ending south of its 10-week and 20-week moving averages for the first time since mid-August.