Options Traders Turn Bearish on Oracle

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

Mike Yamamoto, managing editor for OptionMonster.

REDWOOD CITY, Calif. (TheStreet) -- Traders are turning bearish on Oracle(ORCL Quote) today after antitrust concerns arose about its acquisition of Sun Microsystems(JAVA Quote), which is losing market share according to a new report.

Options activity is heaviest in the December 20 contracts, where more than 19,000 puts have changed hands in large blocks at nearly four times the open interest, according to OptionMonster's real-time systems. The options went for 90 cents and 95 cents in a strong buying pattern, dwarfing the average daily volume of just 89 puts at that strike.

Oracle is down 0.9% to $21.75 in midday trading. The database maker has been rising steadily since its March low of $13.80 but has been stuck between $20 and $22 for the last three months.

The stock fell in the weeks after Oracle announced plans to acquire Sun in April but then recovered. Today, however, Oracle fell after industry researcher Interactive Data(IDC Quote) reported that Sun's share of the server market is down more than from the same period last year. At the same time, Oracle is awaiting word from the European Commission, which has been reviewing the merger and is scheduled to announce a decision tomorrow on either approving the deal or further investigation.

For today's put purchases to turn a profit, Oracle would need to drop more than 12% by the time the contracts expire in December.

-- Reported by Mike Yamamoto of OptionMonster in New York.