World Wrestling Entertainment, Inc. (WWE) Sell-Off Has Bears Piling On

Put players have been active on World Wrestling Entertainment, Inc. (NYSE:WWE) in recent weeks, as evidenced by data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, the stock's 10-day put/call volume ratio across this trio of exchanges sits at 26.26 -- in the 98th percentile of its annual range. Simply stated, puts have been bought to open over calls with more rapidity just 2% of the time within the past year.

It's a similar set-up in today's session, with puts crossing the tape at a rate 32 times the intraday average, and outpacing calls by a more than 11-to-1 margin. The majority of the day's action has centered at the November 12 put, where 6,120 contracts have changed hands -- mostly at the ask price, hinting at buyer-driven activity. Implied volatility has jumped 5.7 percentage points, and volume easily outstrips open interest, making it safe to assume new positions are being initiated. Delta on the put is docked at negative 0.32, suggesting a roughly 1-in-3 shot the option will be in the money at the close on Friday, Nov. 21 -- when the front-month series expires.

This bearish positioning shouldn't be too surprising, considering WWE is down almost 60% from its March 13 record high of $31.98. Today, in fact, the shares have surrendered 7.2% to churn near $12.83, after Nathaniel August -- founder of Mangrove Partners -- told CNBC yesterday he was short WWE. He's certainly not alone in his skepticism. At present, roughly one-quarter of the stock's float is sold short, and would take more than 12 sessions to cover, at WWE's average daily pace of trading.

On the fundamental front, World Wrestling Entertainment, Inc. (NYSE:WWE) is scheduled to report quarterly earnings before the open next Thursday, Oct. 30. The stock's post-earnings price action tends to side with bulls, and over the past four quarters, WWE has gained an average of 6.1% in the session subsequent to reporting. For the company's third-quarter, Wall Street is calling for a per-share loss of 17 cents.