NetEase.com has been hovering in a range for most of the year, and one investor is scared about a collapse.

Our monitoring programs detected a surge of activity in the September and October options, which pushed total option volume in the Chinese gaming stock to 9 times greater than average.

It appears that an existing bearish collar strategy in September--entailing a long position in the 44 puts and a short position in the 50 calls--was closed for a credit of $0.10. The investor then opened a similar trade in October at a cost of $0.30, resulting in a total outlay of $0.20.

NTES fell 1.29 percent to close at $47.32 yesterday. It started the year by rallying from about $36 to over $53 but has been drifting ever since April. Its last earnings report on Aug. 18 beat expectations on the top and bottom lines but did little to break the shares of their range.

Yesterday's collar trades are probably the work of an long-term investor in the stock who wants to protect against a push to the downside. The strategy is a combination of writing covered calls and buying protective puts, capping their upside potential but also providing a hedge to the downside. (See our Education section)