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Yesterday after the close, Pitney Bowes (PBI – 27-1/4) said that its full-year 2000 earnings would range between $2.44 and $2.48 per share, while analysts had expected the company to post net income of $2.58 per share. This warning prompted two major brokerage firms to cut their ratings on the stock. After a delay at the open, PBI gapped 8-1/8 points lower and is presently sitting at its lowest level since January 1997.
Options players were apparently anticipating this news. Over the past few sessions, PBI's options configuration has taken a pessimistic turn. Its Schaeffer's put/call open interest ratio (SOIR) jumped from 0.29 on Monday to 0.74 today. During that time, put open interest tripled for options expiring within the next three months, while call open interest increased by only 22 percent.