Transdigm Group (TDG, news, chart) saw bearish spread trading Monday ahead of earnings. The stock rose 36 cents to $37.88 and volume in the options market rose to 128 times the usual. The volume included 15,000 puts and just 15 call options. Most of the action was in the August 35/30 put spread. For example, at 15:30 Eastern time, 2,000 of the August 35 puts traded offerside for $1.05 a contract. Meanwhile, the same number of August 30s traded bidside for a dime.

The action was repeated several times and volume in the 35s rose to 7,170 contracts, compared to open interest of 372. Volume in the 30s topped 9,000, compared to open interest of 572. It seems then, that the strategist was buying the 35s and selling the 30s to open, which would be a bearish vertical spread for a net debit of 95 cents and a potential payoff of $9.05 if TDG falls to $30 or less by August options expiration (11 days). The maker of aircraft component parts for commercial and military aircrafts is due to report earnings Tuesday before the opening bell.