Options Bears Blast TEAM's Tumble From Record Highs

Puts are running at two times their average daily volume today

Software development name Atlassian Corporation PLC (NASDAQ:TEAM) is taking a breather on the back of today's tech sector selloff. At last check, the stock is off 5.4% at $163.58, eyeing its second consecutive close below the 10-day moving average, which guided TEAM to its May 15 record high of $190.21 and acted as a floor in the weeks following. TEAM is trading at three-week lows today, but is still up 36.4% for the year.

This week's nosedive is bringing some options bears out of the woodwork. So far today, 4,578 puts have crossed the tape -- two times the average intraday volume, and double the number of calls traded. Most popular is the weekly 5/29 155-strike put, with positions being opened here, followed by the June 140 put. This suggests these traders are speculating on a lot more downside for TEAM by the time these contracts expire.

This penchant for bearish bets is unusual, considering that in the last 10 days, 5,152 calls exchanged hands, compared to 2,545 puts. Short-term traders, meanwhile, were much more put-biased. This is per TEAM's Schaeffer's put/call open interest ratio (SOIR) of 1.57, which sits in the 96th percentile of its annual range.

Analysts are still quite bullish on Atlassian. Of the 18 covering the security, 14 say "strong buy," four say "hold," and there isn't a single sell to be seen. On the other hand, the consensus 12-month price target of $170.63 is just a 3.9% premium to current levels.

For those wanting to speculate on TEAM's next move, options look like a prudent play at the moment. The equity's Schaeffer's Volatility Index (SVI) of 44% is higher than just 21% of readings from the past year. This indicates that the options market is pricing in relatively low volatility expectations right now.