Traders Brace for DirecTV Drop: 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.

NEW YORK (TheStreet) -- Options position for DirecTV(DTV Quote) drop: The satellite television carrier has lagged the broader market for the past six months, and now one investor is positioning for a potential move to the downside.

Valeant Pharmaceuticals(VRX Quote) draws bearish put trading: The options action takes place a day after the pharmaceuticals firm announced plans to acquire skin-care company Private Formula for $73.4 million in cash and stock.

American Italian Pasta(AIPC Quote) calls surging: The small-cap food company has dropped 15 percent since mid-September, and one option trader is buying calls on the dip.

Options bullish on Morgan Stanley(MS Quote): The financial firm continues to pullback from 52-week highs, but today's option trading is looking for further gains.

Bulls roam the aisles at Supervalu(SVU Quote): Supervalu has been outperforming other grocery stocks recently, and now at least one investor is looking to get long before the next earnings report.

Wednesday Pre-Market:

Lessons from the king of risk management: A vintage video chronicles the trading of Paul Tudor Jones and his prediction of the 1987 crash. The lessons still apply today.

Options see top for Medicis Pharmaceutical(MRX Quote): A large trader is apparently calling a top in the maker of cosmetic medical products, which is up 34 percent in the last three months.

XLE(XLE Quote) shows how puts can be bullish: Many people assume that put buying automatically reflects a bearish position, but trading in the energy ETF illustrates why that's not always the case.

'Sector detector' says buy XLU(XLU Quote), sell XLB(XLB Quote): Utilities maintain the highest rating in the latest index revision, but the materials sector has replaced the financials at the low end of the scale.

Insurance extended on TCF Financial(TCB Quote): The lender has gotten knocked down over the last eight sessions, and one big shareholder is apparently using options to protect against losses while staying long.