Investors Bet on Oracle Drop

Volume soared Tuesday for options betting that shares of No. 1 database software maker Oracle Corp. will fall as traders and investors speculated that the company would report negative news.

The volume of put options for June surged to 12,954, or 15 times their three-month daily average of 814. Put options are the right to sell shares at a specified price and date. Investors in puts are betting that the company’s shares will fall.

“Those puts are very expensive. They’re expensive for a reason. They’re expecting bearish news,” said Paul Foster, a trader at 1010 Wall Street, a Chicago-based options trading firm.

Redwood Shores, Calif.-based Oracle has struggled along with software makers PeopleSoft Inc. and Baan Co. as demand for software has slowed and corporations have delayed purchases to focus on fixing the year 2000 computer problem. Investors also expressed concern in mid-May because some analysts said they expect a slowdown in sales of Oracle’s flagship database software, which some investors interpreted as weaker-than-expected earnings.

Oracle spokeswoman Jennifer Glass declined to comment on the options activity.

Oracle shares fell $1.38 to close at $27.13 on Nasdaq.