XL Capital, Bally, Rovi: Options Recap

OptionMonster co-founder Pete Najarian provides options picks Monday, Wednesday and Friday in TheStreet.com's Deep in the Money Calls newsletter.

David Russell, reporter for OptionMonster.

XL Capital(XL Quote) draws calls before report: The commercial reinsurer sees bullish call buying hours before it reports earnings, and a day after heavy put selling in the name.

Cautious trade in GlaxoSmithKline(GSK Quote): The U.K.-based drugmaker reported better-than-than expected third-quarter earnings, but the tone remains cautious.

How S&P 500 relates to the dollar: Although the correlation is not perfect, this inverse directional relationship is important between the two assets. Our charts show why.

Bulls bet on jackpot in Bally Technologies(BYI Quote) earnings: The maker of slot machines and casino-management software reports earnings after the close tomorrow, and options action is turning bullish.

Masco(MASO Quote) can't shake the bears: The maker of building supplies reported strong earnings Monday and raised its guidance, but the bears haven't gone away.

Trader positions for rally in Rovi(ROVI Quote): The digital-rights company, formerly known as Macrovision, has been correcting lower for the last three weeks, and now one trader is positioning for a rebound.

Wednesday Pre-Market:

VIX up 25% from last week: The index is up another 3.3%, pushing the gap between implied volatility and realized volatility back to significant levels.

NDX plays 'catch-up' to downside: Yesterday's surprise miss by Baidu helped to take down related names and dampen sentiment in the Internet space, bringing the Nasdaq 100 closer to its 50-day moving average.

Bulls target Lincoln National(LNC Quote) before earnings: The annuity company reports earnings after the bell, and the bulls are looking for upside in the next month.

Chesapeake Energy(CHK Quote) faces volatility trade: Volatility in this energy name is down by about two-thirds in the last 11 months, and now one trader is betting on a rebound.

Trader sells puts in Germany ETF: One option trader used yesterday's fall in the EWG Germany exchange-traded funds to sell puts in the January contracts.