The runaway

Dow

had option investors split between watching cyclical stocks run this morning and rolling back some previous call strategies, several options pros said.

"I've never seen anything like this," said Jay Shartsis, options strategist for

R.F. Lafferty

. "I've never seen a market with this much divergence within its own body." With so much money flying out of tech stocks and into cyclicals, the Dow's early gain today came at the expense of the tech sector, Shartsis explained.

He pointed out that companies like

Boeing

(BA) - Get Report

and

International Paper

(IP) - Get Report

were up, while some Internet companies, especially the online brokerages such as

Schwab

(SCH)

and

E*Trade

(EGRP)

(down 13% and 17%, respectively) were getting pummeled.

As the afternoon began, though, the market turned dramatically, and even some of the cyclicals looked weak, though the techs were still leading the way down.

In the options world, the Dow's upward gallop of 270 points today sent some investors back into call-buying strategies, according to Jerry Hegarty, of

Cape Market Research

. "Since it is the first day of the new cycle

options expiration was last Friday, I think everyone wants to get their call positions set up," he added.

Hegarty noted the volume today is not that heavy, however, and suggested some options investors are playing it safe and watching from the sidelines. "I know people are looking for safe-harbor stocks, and right now, it looks like cyclicals are it," he said.

Michael Schwartz, chief options strategist for

CIBC Oppenheimer

, suggested investors were closing out covered calls they had sold on some of the Internet companies, buying back the now-cheaper call and rolling down to lower strikes. "With

AOL

(AOL)

leading options volume down about 14, I doubt that too many people were buying new calls," Schwartz said. "I can't believe anyone would buy against this tape."

TheStreet.com Internet Sector

index was getting crushed, falling 64 to 604 by midday. Options players went right for out-of-the-money puts to grab some protection. The May 490 and 560 puts traded 350 contracts against little open interest (none in the case of the May 560s) and saw tremendous spikes in premium. The price tag on the May 490s rose 9 7/8 ($987.50) to 15 ($1,500).

American International Group

(AIG) - Get Report

saw a huge extension play on its call side ahead of its scheduled earnings announcement April 22. About 10,220 contracts in its May 75 calls moved against higher open interest, while 10,620 contracts in its 2000 January 80 LEAPS moved against only 135 contracts of open interest. The dual play likely meant the investor was closing the May 75s, at 52 1/4, or $5,225 per contract, while opening the LEAPS at 50, or $5,000 per contract. The difference in the approximately $105 million trade had the investor taking in (by closing the May 75s) about $400,000 more than he paid for the LEAPS.

Both sets of call options were deep in the money, as AIG's stock was at 125 1/2, up 5 9/16, this afternoon.

On the speculative side, one investor looked to be staking out some out-of-the-money call plays in a gold stock, Schwartz said.

Newmont Mining

(NEM) - Get Report

saw 2,285 September 25 calls move against no open interest. The calls went out at 1 13/16, or $181.25 per contract, indicating investors were buying the calls.

It couldn't be determined whether the traders were buying Newmont calls expecting further appreciation in the stock or selling Newmont calls against new stock purchases as a hedge.