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Traders have been taking a bearish tack lately with GPS specialist Garmin Ltd. (NASDAQ:GRMN - 40.48), according to data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Over the past 10 sessions, speculators on these three exchanges have bought to open 31.66 puts for every call on GRMN, pointing to a heavily pessimistic slant. In fact, this ratio ranks above 99% of other such readings taken during the past year. This lofty percentile rank reveals a near-peak of bearishly biased speculation on the stock.
In the same downbeat vein, GRMN's Schaeffer's put/call open interest ratio (SOIR) arrives at 2.02, as puts more than double calls among options set to expire within three months. This ratio outranks 86% of comparable annual readings, confirming a broadly bearish mood toward the shares.
Elsewhere, no less than 16.3% of the equity's float is dedicated to short interest. At the average daily trading volume, it would take the shorts nearly three weeks to cover all of their bets against GRMN.
In fairness, the stock spent a healthy chunk of 2012 trending lower, with its early May peak at $50.67 giving way to a fresh year-to-date low of $35.55 in mid-July. However, GRMN has since recovered a bit, with the shares currently treading water between support at $40 and short-term congestion around the $42 area. As of Wednesday's close, the stock had managed to collect a year-to-date gain of roughly 3%.
At last look, GRMN is trading fractionally lower after announcing the acquisition of Nexus Marine AB for an undisclosed amount. With the stock lingering less than one point below peak front-month put open interest at the September 41 put, many speculators appear to be bracing for a notable short-term breakdown.