After dropping some 36% since this time last year, I wanted to get into Garmin (GRMN) puts, as  I expect continued weakness in the ailing GPS maker.

The success or failure of the newly released Forerunner 230/630 watches isn’t a game-changer in an already crowded field for wearables. More importantly, Garmin’s new watch doesn’t include heart-rate monitoring, which is one reason why there has been a sudden boom in wearables.

Additionally, its quarterly numbers tend to add some drama. GRMN shares fell from $36.96 to close at $32.28 on the October low after the company cut guidance for the second time in four months. A few weeks later, the company reported a profit of $0.51 a share versus estimates for $0.55 a share. Revenue came in at $680 million versus forecasts for a reading north of $687 million.

For its next earnings report, Wall Street is expecting earnings of $0.47 a share on revenue of $759 million when Garmin reports its numbers again in mid-February.

I’m not sure if Garmin will cut guidance again ahead of its fourth-quarter earnings release, but, if it does, GRMN shares will likely tumble on the news. If they stay mum, there is still a good chance the company will miss estimates for at least the fifth-straight quarter.

Garmin has missed earnings by $0.04, $0.06, $0.02 and $0.01, respectively, over the past four quarters. This is never a good sign for a sustained higher stock price, and often it leads to fresh 52-week lows if earnings continue to fall shy of expectations.

The dividend yield for Garmin is now more than 6%, and that could start to attract bullish investors. However, if the company announces a lousy quarter or new sales sputter, the company could cut the yearly payout, which is currently just north of $2 a share.

Considering these factors, including the juicy dividend that could get slashed, I still love the risk/reward for put options in GRMN.

A close below shaky support at $33 should set up a continued backtest to $30. Here’s how I want to play it:

Buy the GRMN February 30 puts (GRMN160219P00030000) at current levels around $0.70.

My Exit Target for the puts is $1.40. I do not have a stop loss in place, but resistance for GRMN is at $34-$34.50.

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