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By David Russell

Up or down, an investor in Weight Watchers International (WTW) is sitting pretty, thanks to the power of options.WTW

Our Depth Charge tracking system detected the sale of 2,500 May 65 puts for $4.10 and the purchase of 7,500 May 60 puts for $2.25. Volume was more than 19 times open interest in the strike.

The trade is apparently a back-spread, on its face a highly bearish position that's looking for a big drop in the diet stock. However, it was probably the work of an investor using it as a hedge on a long position in the stock.

If WTW pushes below $65, they'll be obligated to buy more shares at that price -- something they may not mind doing if they like it long term. However, if it suffers a bigger collapse below $60, they'll make more money on the lower-strike puts because that position is 3 times larger.

The trade makes a lot of sense considering that WTW made a giant surge after a strong earnings report last month, gapping from the $44 level to over $60. Investors may want to own the shares around the current price, but also want protection in case they retrace some or all of that move.

It's down 1.33 percent to $64.12 in afternoon trading. Overall options volume in the name is 10 times greater than average so far today, with puts outnumbering calls by 18 to 1.

Source: Interesting Hedge on Weight Watchers