Layoffs continue to roll in across the newswires. This morning, Cummins Engine Company Inc. (CMI: sentiment, chart, options) announced that it plans to cut 800 jobs by the end of February. In addition, the firm will reduce executive salaries by 10% this year and freeze other wages. Combined with its previous actions taken in December, Cummins will have reduced its professional workforce by more than 1,400 people, or 10%.

From a sentiment perspective, options players are extremely optimistic when it comes to CMI. The Schaeffer's put/call open interest ratio (SOIR) for CMI stands at 0.54, as call open interest nearly doubles put open interest among options that are set to expire in less than 3 months. This ratio is also lower than 95% of all those taken during the past 52 weeks. In other words, options players have been more optimistic just 5% of the time during the past year.

What's more, during the past 10 trading days, the International Securities Exchange (ISE) reported an average of 3 calls purchased to open for every 1 put purchased to open. This ratio of calls to puts is higher than 93% of all those taken during the past 52 weeks.

In early trading this morning, the shares of CMI are down nearly 2%, pulling back to test potential support at the 25 level.