Options Recap: Merck, Cubist, Leap Wireless

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

By David Russell, a reporter at OptionMonster .

Frontier Oil(FTO Quote): The oil company has given up about 30% of its value since the beginning of June when the price was above $18.

Plains Exploration(PXP Quote): The oil and gas company is down 17% in the past month, and at least one large trader is betting on further downside.

Sigma Designs(SIGM Quote): The company is down more than 13% from its recent high, allowing one trader to take profits and maintain a bet against the semiconductor company.

Merck(MRK Quote): Shares of the pharmaceutical company are trying to claw back some of the losses from Thursday, but the options action is bearish.

Cubist(CBST Quote): The pharmaceuticals company will report earnings next week, and one trader is positioning for a bumpy ride in the shares.

Monday Pre-Market:

A closer look at bid/ask spreads: A reader recently asked how and why bid/ask spreads vary for different strikes and underliers. To explore the issue, we compare the cases of U.S. Steel(X Quote) and AmBev(ABV Quote) calls.

Leap Wireless(LEAP Quote): The wireless carrier is down 19% in the past month, prompting traders to bet on a rebound.

ICICI(IBN Quote): The Indian bank is near its highs and seeing some interesting options trading as both puts and calls light up our systems.

Infosys(INFY Quote): At least one big investor thinks the outsourcing firm is headed lower after it enjoyed four months of gains and ran up against potential resistance at $37.50.