NEW YORK, Feb 5 (Reuters) - A large bet in the options of Pandora Media Inc on Thursday appeared to be banking on a sharp drop in the share price of the U.S. Internet-radio-service provider after it reports its quarterly results later in the day.
On Thursday, a trader in the options market appeared to have bought 14,000 Pandora put options that bet on shares dipping below $16 by Friday, or about 13 percent, said Fred Ruffy, options strategist at WhatsTrading.com. The contracts were traded at 35 cents.
Such a plunge would not be out of character for the shares, which have fallen by an average of about 10 percent after each of the last seven earnings reports.
Puts, used to make bearish bets, outnumbered calls by a ratio of 3.5 to 1, the biggest margin in more than a year, according to data Thursday from options analytics firm Trade Alert.
Pandora's shares have been pressured of late on concerns about slowing user growth. They have fallen about 18 percent since the company reported third-quarter results in October.
The company faces stiff competition from Spotify, Apple Inc's Beats online streaming service, Google Inc , and Amazon.com Inc in the fast-growing music streaming business.
Pandora shares were down 1 percent at $18.31 on Thursday. The company will release its fourth-quarter results after the close of U.S. stock market.
On Thursday, the cost of a Pandora straddle, in which an investor buys an at-the-money put option and a similar call option, suggested a move of about 12 percent in either direction by Friday.
The options were unusually busy on Thursday with contract volume of 37,000, triple what it normally is, by 1:30 p.m. ET (1830 GMT). (Reporting by Saqib Iqbal Ahmed; Editing by Bernadette Baum)