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) 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) 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) 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): 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): 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): 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) 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), sell XLB(XLB): 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): 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.