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Today, we’re opening a new bearish trade on FireEye (FEYE). Security and application software companies have not had a great quarter, and things got a lot worse yesterday with a warning from Fortinet (FTNT). The factors affecting FTNT are likely to be a major drag on FEYE, where profitability is already non-existent.

The break of support should send the stock back to long-term support as earnings approach. Implied volatility levels are already a bit elevated, but compared to similar setups in the past, the options are relatively cheap. We like the trade as a way to potentially take advantage of the shift from speculative to value stocks in the coming weeks as investors fret about earnings.

Buy to open the FEYE November 13 Puts (FEYE161118P00013000).

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InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of SlingShot Trader, a trading service designed to help you make options profits by trading the news. Get in on the next SlingShot Trader trade and get 1 free month today by clicking here.