Blue-chip tech concern Cisco Systems, Inc. (NASDAQ:CSCO - 21.01) is bucking the broad-market trend higher, and option traders are bracing for even more downside in the wake of tomorrow night's earnings report. So far today, CSCO has seen roughly 48,000 puts change hands -- more than twice its average intraday volume.

Attracting the most attention by a landslide is the February 20 put, which has seen around 15,800 contracts traded thus far. Eighty percent of the puts have crossed at the ask price, and implied volatility was last seen 3.6 percentage points higher, pointing to newly bought bearish bets.

By purchasing the puts at a volume-weighted average price (VWAP) of $0.16, the buyers expect CSCO to breach the $19.84 level (strike minus VWAP) by the closing bell on Friday, when February-dated options expire. As alluded to earlier, CSCO will unveil its quarterly report after the market closes on Wednesday, suggesting the speculators are anticipating a post-earnings pullback. However, even if CSCO treks higher through the end of the week, the buyers' maximum risk is the initial premium paid for the puts.

From a sentiment perspective, today's appetite for puts marks a shift in sentiment among options players. During the past two weeks on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open more than three CSCO calls for every put. In fact, the stock's 10-day call/put volume ratio of 3.49 registers in the 73rd percentile of its annual range, implying that option players have initiated optimistic positions at a quicker-than-usual step recently.

At last check, CSCO has shed 1.2% to hover just north of $21, despite scoring a price-target hike to $25 from $22 at Piper Jaffray this morning. From a longer-term standpoint, the stock has added 26% since its mid-November low of $16.68, led higher atop its 10-day and 20-day moving averages. These two trendlines have ascended into the $21 neighborhood, and seem to be containing today's retreat.

Off the charts, the company has surpassed the Street's bottom-line earnings estimates in each of the past four quarters. Ahead of tomorrow's report, analysts are anticipating a per-share profit of 48 cents.