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Nov. 11 (Bloomberg) -- Cisco Systems Inc. option trading jumped to a record and was 19 times the four-week average on wagers that the world’s largest computer networking-equipment maker will rebound after the biggest drop since July 1994.

Volume exceeded 1.58 million contracts as almost 1 million calls changed hands compared with 586,000 puts as of 4 p.m. in New York. The most-active contracts were November $21 calls, April $24 calls and April $18 puts. The shares declined $3.97, or 16 percent, to $20.52.

“Many investors are utilizing options to position for a recovery in Cisco’s shares,” said Caitlin Duffy, an equity options analyst at Interactive Brokers Group Inc., which is based in Greenwich, Connecticut. “It seems a number of options traders see the new value of the shares as attractive and ripe for harvest.”

Cisco, based in San Jose California, tumbled after its profit and sales forecast fell short of analysts’ estimates because of increased competition and lower government spending. The drop wiped out Cisco’s gains since Sept. 2.

November $21 calls traded 69,000 times, more than eight times the previous number of outstanding contracts before today. Fifty-eight percent changed hands on the ask price, which indicates that buyers initiated most of the transactions. The contracts dropped 91 percent to 30 cents.

“It looks like investors are scooping up cheap calls at deep out-of-the-money strikes, which could result in significant profits in the event that Cisco’s shares reverse course before the end of the year,” Duffy wrote in an e-mail.

To contact the reporters on this story: Nikolaj Gammeltoft in New York at; Jeff Kearns in New York at

To contact the editor responsible for this story: Nick Baker at

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