Bullish bets are being made on Cisco Systems (CSCO.O) ahead of the company's earnings report after the bell on Wednesday.

But the optimism stems from the fact that the company has lost more than 30 percent on the year as competitors such as Juniper Networks (JNPR.N) and Brocade Communications Systems (BRCD.O) have been hit following results.

Shares of the world's top manufacturer of routers and switches hit a new 52-week low of $13.30 on Tuesday, and the stock is currently trading down 2 percent at $13.77.

"We are expecting a move of $1.60, or a little over 11 percent and investors are mostly expecting a pop after the earnings because they are thinking, 'How low can the stock go?'" said Joe Kinahan, TD Ameritrade's chief derivatives strategist.

Options trading volume on Cisco by midday was already twice the daily average levels, according to Trade Alert.

The most popular trades were weekly $15 strike calls that expire on Friday with 19,748 contracts traded. Regular Aug $15 calls were also active with 15,591 contracts traded.

Cisco since last year has warned that government spending cuts will include network equipment. Investors expect a weak outlook after Juniper and Brocade slashed their forecasts.

Cisco shares have traded lower after each of the four previous earnings reports. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Reuters Insider on Cisco: here ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Reuters Quantitative Analyst Mike Tarsala said Cisco's shares have performed so poorly and analysts' outlook for the company's earnings are so bad there's a chance it could surprise to the upside.

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