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Optical equipment maker Ciena (CIEN - 73) has fared better than most of its competitors during the Nasdaq slide the last few months. Until yesterday, the stock had been able to float around the range of its 10-day moving average, like a stranded swimmer clinging to a life preserver. But yesterday, it let go and today it is drowning in a sea of red, down over 17 percent on heavy volume. The catalyst appears to be rumors of another supplier signing a contract with CIEN's largest customer. For some time, there has been concern about the financial health of other CIEN clients that are telecommunications carriers. CIEN's next earnings report is due next week on December 7. That may calm the turbulence, but until then the shares would do well just to tread water.
Accompanying today's free fall is some significant options activity. The December 85 put has traded 13,319 contracts today, with 6,250 of those consisting of one block trade. Over 10,000 contracts of the December 95 put also changed hands. Most of this activity was two block trades of 5,000 each. Most other near-the-money options logged volumes in the 1,000-3,000 range. The December 85 put has open interest of only 895 contracts, so today's activity is likely new positions. The December 95 put, however, has open interest of 10,300, so today's trading could be openings and/or closings.