Pessimistic option players rushed to place their bets on Intrepid Potash, Inc. on Thursday, ahead of the company's third-quarter earnings release. After the closing bell, it appears the skeptics may have got their wish, as the potash producer recorded an 81% drop in quarterly profit, thanks to significantly lower sales volumes and gross margins. However, the results were roughly in line with analysts' expectations.

During the course of Thursday's session, IPI saw close to 3,500 puts cross the tape - almost doubling the number of IPI calls traded, and nearly tripling its average daily put volume of about 1,200 contracts. Most of the volume consisted of fresh positions at the November 27 strike, which saw more than 1,000 contracts traded on put open interest of fewer than 500. The at-the-money 27 strike is now home to peak put open interest in the front-month series, with about 1,150 contracts outstanding.

Yesterday's bearish bias mimics the recent trend on the International Securities Exchange (ISE), where speculators during the past two weeks have purchased to open more IPI puts than calls. In fact, the equity's 10-day put/call volume ratio of 1.23 ranks in the 89th annual percentile, implying that IPI puts have been flying off the shelves at a much faster pace than usual lately.

In late-morning trading, the shares of IPI have surrendered 35 cents, or 1.3%, to hover near the $27 level. Containing the equity's pullback may be support at its 10-month moving average, which has acted as a foothold for the stock since May.

International Game Technology was a popular target in the options pits on Thursday, as traders placed their bets ahead of the firm's fiscal earnings report, which hit the Street after the closing bell. The slot-machine maker reported a stronger-than-expected profit in the fiscal fourth quarter, and said it saw signs that business was beginning to stabilize.

During the course of the session, IGT saw roughly 5,200 puts and 4,900 calls cross the tape, more than tripling its average daily volume of about 1,600 puts and 1,500 calls. The November 18 put was most active, with close to 1,800 contracts changing hands. On the flip side, the November 19 call attracted the most attention, with roughly 1,400 contracts traded. The 18 and 19 strikes are now home to peak put and call open interest in the front-month series, with about 3,750 puts and 3,000 calls in residence, respectively.

Ahead of the company's turn in the earnings spotlight, most near-term traders were skeptical of IGT. The stock's Schaeffer's put/call open interest ratio of 1.06 ranks in the 80th annual percentile, indicating that short-term speculators have been more bearishly biased toward the equity only one-fifth of the time during the past 52 weeks.

In light of the firm's pleasant quarterly figures, the shares of IGT have defied the broad-market trend lower today, advancing $1.70, or 9%, to linger in the $20.20 region.

Put traders converged on MGM MIRAGE on Thursday, after the casino concern posted a third-quarter loss. During the course of the session, the stock saw about 23,100 puts change hands, more than doubling its average daily volume of fewer than 10,500 puts.

Digging deeper into yesterday's put volume, we find that one investor or institution honed in on the 15 strike. The security's deep-in-the-money November 15 and March 15 puts each saw 10,000 contracts cross the tape. All of the contracts traded at the ask price, suggesting they were bought, with the front-month puts exchanged for $5.60, and the longer-term contracts exchanged for $6.00.

The preference for puts runs counter to the recent trend on the International Securities Exchange (ISE) and Chicago Board Options Exchange (CBOE). During the past couple of weeks, speculators on the ISE and CBOE have bought to open more MGM calls than puts. In fact, the stock's 10-day call/put volume ratio currently stands at 2.67, in the 84th annual percentile. In other words, option players on the exchanges have rarely scooped up MGM calls at a more rapid pace during the past year.

At last check, the shares of MGM have backpedaled 22 cents, or 2.3%, to hang out in the $9.50 neighborhood. Pressuring the stock lower is its 10-day moving average, which, in conjunction with its 20-week counterpart, has acted as impenetrable resistance since mid-September.

Options trading was heavy on McDonald's on Thursday, as more than 69,400 contracts changed hands on the security. The jump in volume was nearly three times the equity's average daily trading volume of 23,900 contracts, according to data from WhatsTrading.com. In addition, approximately 60% of the volume changed hands on the call side.

Looking at the action in the front three months of options, we find that the November 62.50 call added approximately 7,000 new positions. Meanwhile, the January 2010 60 call added 12,000 new positions and the January 2010 60 put added approximately 13,000 new positions in a potential straddle trade.

The International Securities Exchange (ISE) has seen an uptick in call trading, as 1.8 calls have been purchased to open for every one put purchased to open during the past 10 trading sessions. This ratio of calls to puts is higher than 80% of all those taken during the past year.

However, sentiment among options players is far from an optimistic extreme. The Schaeffer's put/call open interest ratio rests at 1.29, as put open interest outnumbers call open interest among options slated to expire in less than three months. What's more, this ratio is higher than 80% of all those taken during the past year, indicating that short-term options players have been more skeptical of the shares only 20% of the time during the past 12 months.

Whole Foods Market was the center of some brisk options trading on Thursday, as more than 76,100 contracts crossed the tape. This jump in volume was nearly six times the equity's average daily trading volume, according to data from WhatsTrading.com. Furthermore, 52% of the volume changed hands on the put side.

Digging into the action in the front three months of options, we find that the November 27 put shed more than 7,000 positions, while the November 31 put dropped roughly 8,000 positions. Meanwhile, the November 37 call shed 8,000 positions.

Overall, the International Securities Exchange (ISE) has seen a preference for calls over puts. During the past two trading weeks, two calls have been purchased to open for every one put purchased to open. This ratio of calls to puts is higher than 65% of all those taken during the past year.

Meanwhile, the Schaeffer's put/call open interest ratio sits at 1.00, which is lower than roughly two-thirds of the readings taken during the past year. In other words, short-term options players have been more optimistically aligned toward the shares only one-third of the time during the past 12 months.

On the other hand, Wall Street is extremely skeptical of the shares. According to Zacks, the stock has earned zero "buy" ratings, 11 "holds," and two "strong sells." Any upgrades from this group could add some lift to the shares.

On Thursday, Motorola was the center of some brisk options trading, as more than 70,800 contracts changed hands. This volume was more than double the stock's average daily trading volume of 34,066 contracts, according to data from WhatsTrading.com. Furthermore, it appears that 71% of the volume changed hands on the call side.

Drilling down on the action in the front three months of options, we find that the December 7 put added roughly 2,400 new positions. Meanwhile, the January 2010 7.50 put added 5,000 new positions, while the January 2010 10 call shed 3,000 positions.

Overall, the International Securities Exchange (ISE) has seen a preference for calls on the security. During the past 10 trading sessions, 4.4 calls have been purchased to open for every put purchased to open. This ratio of calls to puts is higher than 68% of all those taken during the past 12 months.

The shares of MOT could see some action today following news that wireless LAN vendor Aruba Networks Inc. said it will pay Motorola Inc. $19.8 million to settle patent disputes. The disputes involved patents owned by both parties, and the settlement includes a cross-licensing agreement, the companies said in a joint statement. Aruba will account for the settlement payment as a one-time expense for the fiscal first quarter ended Oct. 31, the company said in a filing. The legal battle dates back to August 2007, when Motorola's subsidiary companies Symbol Technologies and Wireless Valley Communications filed a lawsuit against Aruba on concerns that Aruba had infringed patents related to wireless local area network (WLAN) communication technologies.

Calls are a popular choice on State Street Corporation today, with volume accelerating to five times the usual level. After checking out the day's activity, it looks as though a bullish bettor is opening a long call spread on the financial firm.

Three large blocks, totaling 10,000 contracts, changed hands earlier today on STT's December 50 call, with all transactions occurring close to the bid price. Simultaneously, three symmetrical blocks totaling 10,000 contracts traded on the equity's December 46 call, with these trades taking place closer to the ask price.

In a long call spread, the trader buys to open a call option at a lower strike, while simultaneously selling a call at a higher strike. Usually, the underlying equity is trading at or below the strike of the purchased call. This strategy is an ideal way to capitalize on modestly bullish expectations, because the sold calls will partially offset the cost of the purchased contracts.

In the best-case scenario, STT will finish right at $50 at December expiration. This will allow the trader to pocket the maximum gain on the purchased calls, while the sold calls will expire worthless. At last check, STT was up nearly 5% to trade at $42.67 per share.

Railroads are in the spotlight this week, thanks to Warren Buffett's headline-grabbing acquisition of Burlington Northern (BNI). The top brass at sector peer Union Pacific Corporation (UNP) said Wednesday that the buyout was a "strong positive statement" for the industry, but traders are nevertheless adopting a distinctly bearish stance toward the stock.

During the course of Wednesday's trading, speculators on the International Securities Exchange (ISE) bought to open 6,616 puts on UNP, compared to just 125 calls. In fact, during the past five days, option traders on the ISE have purchased 10,024 puts and only 1,332 calls.

Yesterday's most active strike was UNP's November 55 put, where 17,595 contracts crossed the tape. About 74% traded at the ask price, revealing a bias toward buying activity, and implied volatility rose 5.2% as a result. Open interest on the November 55 put soared overnight from 6,413 contracts to 22,255 contracts, confirming that most of Wednesday's volume consisted of newly added bearish bets.

On the charts, UNP is flirting with a technical breakdown. The stock breached support at its 80-day moving average on Oct. 26, and it has so far failed to reclaim a foothold above this critical trendline.

Put traders swarmed EMC Corporation on Wednesday, after the technology titan's inventory issues had an ill effect on the fourth-quarter projections of business partner STEC, Inc. (STEC). During the course of the session, the security saw almost 13,200 puts change hands - doubling the number of EMC calls traded, and nearly tripling its average single-session put volume of about 4,700 contracts.

Digging deeper into the data, the November 16 and January 2010 15 puts were most active, with roughly 5,100 contracts crossing the tape apiece. However, it was the gutsy spread action in the December option series that really piqued my interest.

At 2:16 p.m. Eastern, the December 17 strike saw a block of 2,121 puts trade for $1.04, and an equal number of calls change hands for $0.56. All of the contracts traded at or closer to the bid price, suggesting they were sold. As such, it seems we've uncovered a short straddle on EMC, with at least one investor expecting the stock to remain stagnant through December options expiration.

In order to pocket the initial net credit of $1.60 ($1.04 + $0.56) - which represents the maximum potential reward on the play - the strategist needs the shares of EMC to finish exactly at the $17 level by expiration, rendering all of the options worthless. At last check, the stock has advanced 2.3% to hang out in the $16.90 neighborhood.

Molson Coors Brewing Company was a favorite target among put players on Wednesday, after the brewing behemoth cautioned that consumer demand has remained soft in the fourth quarter. During the course of the session, the equity saw about 2,200 puts cross the tape - almost six times its average daily volume of fewer than 400 contracts.

The at-the-money 45 strike was most popular all around yesterday, as the January 2010 45 put saw close to 900 contracts change hands. Meanwhile, the equity's December 45 put saw single-session volume of almost 750 contracts, while TAP's November 45 put saw 365 contracts cross the tape.

Yesterday's preference for puts contradicts the pre-earnings optimism toward TAP in the option pits. The stock's 10-day call/put volume ratio on the International Securities Exchange (ISE) stands at 16.57 - only one percentage point shy of an annual bullish peak. In other words, option players on the ISE have bought to open TAP calls at a faster pace only 1% of the time during the past 52 weeks.

On that same note, the security's Schaeffer's put/call open interest ratio (SOIR) currently rests at 0.52, suggesting that calls are almost twice as popular as puts among near-term options. What's more, the stock's SOIR ranks in the 14th annual percentile, implying that short-term speculators have been more optimistically aligned toward TAP only 14% of the time during the past year.

At last check, TAP has defied the broad-market trend higher, backpedaling 2% to hang out in the $44.30 region.

STEC, Inc. options were practically flying off the shelves on Wednesday, after the flash memory firm warned that sales will remain weak and inventory levels will stay high in the fourth quarter. During the course of the session, the security saw roughly 31,900 calls change hands, more than tripling its average daily volume of fewer than 10,400 contracts. On the flip side, the equity saw close to 24,500 puts cross the tape, more than four times its average single-session volume of about 5,700 contracts.

Digging deeper into the data, both the bulls and bears converged on the now-at-the-money November 15 strike, with roughly 8,400 calls and 5,800 puts traded. Most of the volume translated into new positions, with both put and call open interest at the 15 strike escalating overnight. However, the overhead 22.50 strike remains home to peak open interest in the front-month series, with about 7,400 calls and 4,900 puts in residence.

Technically speaking, in the wake of the company's disappointing fourth-quarter outlook, the shares of STEC surrendered almost 40% on Wednesday. The stock is now attempting to find a foothold at its 20-month moving average, lingering in the $14 neighborhood.

However, in light of its rapid descent, the equity could be vulnerable to a wave of bearish brokerage notes. According to Zacks, seven out of 10 ranking analysts rate STEC a "strong buy," leaving the door wide open for potential downgrades.

UnitedHealth Group was the center of some heavy options trading yesterday, as more than 162,000 contracts changed hands, according to data from WhatsTrading.com. This surge in volume was more than five times the equity's average daily trading volume of nearly 29,000 contracts. Furthermore, 84% of the volume changed hands on the call side.

Digging into yesterday's action, we find that the November 29 call added more than 16,000 new positions, while the December 30 call increased its open interest by more than 35,000 new positions.

The International Securities Exchange (ISE) has also seen an increase in call trading. During the past 10 trading sessions, the stock has seen nearly eight calls purchased to open for every one put purchased to open. This ratio of calls to puts is higher than 95% of all those taken during the past year, pointing to a growing optimism.In addition, the Schaeffer's put/call open interest ratio for UNH stands at 0.38, which is lower than 93% of all those taken during the past 52 weeks. In other words, options players have been more optimistically aligned toward the shares only 7% of the time during the past 12 months.

Options trading was brisk on the Hartford Financial Services Group on Wednesday, as more than 62,000 contracts changed hands. This surge in volume was nearly triple the stock's average daily trading volume of 23,643 contracts. In addition, 68% of the volume changed hands on the call side.

Drilling down on the action in the front three months of options, we find that the November 28 call added approximately 5,000 new positions, while the November 27 call increased its open interest by approximately 3,000 positions.

Options players have grown rather complacent toward the shares, as the Schaeffer's put/call open interest ratio for HIG stands in the middle of its annual range at 0.86. Meanwhile, Wall Street is giving the stock the cold shoulder, as 11 of the 15 analysts following HIG rate it a "hold" or worse. Any upgrades from this pack of pessimists could add some lift to the shares.

Technically speaking, the shares of HIG are up more than 48% since the beginning of the year and are currently hovering around long-term support at their 10-week moving average. Additional support is rising into the area in the form of the security's ascending 20-week trendline.

The DirecTV Group was the focus of some brisk options trading on Wednesday, as more than 63,100 contracts changed hands. This surge in volume was more than seven times the equity's average daily trading volume of 9,046 contracts, according to data from WhatsTrading.com. Furthermore, 73% of the volume changed hands on the call side.

Digging into the action in the front three months of options, we find that the November 25 put added 5,000 new positions to lift its open interest up to 10,193 contracts. Meanwhile, the November 27 put added roughly 5,000 new positions to put its open interest at 8,254 contracts. On the other hand, the December 29 call added approximately 17,000 new positions to put its open interest at 26,375 contracts.

Elsewhere, we find that the Schaeffer's put/call open interest ratio for DTV stands at 0.80 as put open interest nearly equals call open interest among options slated to expire in less than three months. This ratio is also higher than 59% of all those taken during the pat year, pointing to a lingering skepticism among speculators.

On the other hand, Wall Street is smitten with the shares, as nine of the 10 analysts following DTV rate it a "buy" or better. This configuration leaves the shares vulnerable to downgrades.

Despite a lack of company news, Deere & Co. has found itself at the center of some heavy options activity this afternoon. Specifically, more than 66,000 contracts have traded on DE, more than tripling the stock's daily average of 19,471 contracts. What's more, this volume appears to have a considerably bearish slant to it, as WhatsTrading.com reports that 93% of DE's options activity has traded on the put side.

While the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.07 hints at complacency by arriving near the midpoint of its annual range, puts are actually slightly favored among options traders on the International Securities Exchange (ISE) and the Chicago Board Options Exchange (CBOE). In fact, during the prior two weeks, puts bought to open have just outnumbered calls bought to open, as DE's 10-day put/call volume ratio arrives at 1.07. What's more, this reading arrives higher than more than 60% of those taken in the past year.

Technically speaking, DE has been trapped in a trading range between support at the 40 level and resistance near 50 since late July. The shares are currently trading near the upper rail of this range, and the added put volume could mean that options traders are expecting DE to reverse course once again.