With the market firmly in neutral ahead of tomorrow's

Fed

meeting, options traders moved toward a few pockets of opportunity on some takeover plays and some big macro bets on the market's direction.

Among those bigger plays were unusually large trades on the

Nasdaq 100

index options, the Nasdaq 100 unit trust options

(QQQ) - Get Report

, and the rallying

Philadelphia Stock Exchange Oil Services index

.

"This is a very hesitant market and that kind of feeling is usually followed by a rally," says Jay Shartsis, the options strategist at

R.F. Lafferty

, a New York brokerage firm.

Shartsis says put-buying has been brisk leading into this week as the mood turned increasingly "black" on the street. But, as with many options traders, Shartsis' contrarian view leads him toward a conclusion that put-buying on stocks such as

IBM

(IBM) - Get Report

,

AT&T

(T) - Get Report

, and

Philip Morris

(MO) - Get Report

will spice up the offerings with some bullishness.

Meantime, the play on the Nasdaq 100 options at the

Chicago Board Options Exchange

produced volume of more than 1000 contracts in both the June 2600 and June 3200 puts as the benchmark hovered around 3378, down 29 at midday.

The trade was likely some type of spread speculating that the Nasdaq will land somewhere between 2600 and 3200 by the third Friday in June.

The action was similar in the

American Stock Exchange's

Nasdaq 100 unit trust options, where 27,168 of the in-the-money May 88 puts and 10,000 of the June 84 puts traded. The QQQ was down 5/16 to 84 5/16 at midday.

The oil services sector index, which has been strong lately, rose 2.3% to 129.98 halfway through Monday's trading. That strength was followed by volume of 5000 contracts in the May 125 and June 130 calls.

With the May options expiration slated for Friday, that trade was likely an up-and-out roll by a trader who wants to stay long the index. By closing out May options position and rolling up one strike price and out another month, one gets to maintain a position that will appreciate with the underlying index.

Meantime, takeover talk was all the rage on the street but wasn't producing the kind of speculative treading most would expect.

Lycos

(LCOS)

, for instance, was up 5 to 59 1/8 but traded about 400 May 70 calls, a contract that saw its price climb 1 ($100) to 2 1/2 ($250). With Lycos in takeover talks with

Terra Networks

(TRRA)

, Lycos is rumored to be seeking $90 a share from Spain's Terra. This typically would have spurred runaway volume but there was little beyond that May 70 action today.

Even reports of several bidders jumping into competition to acquire

Nabisco Group Holdings

(NGH)

didn't bring out the traders.

The stock ran 2 3/4 to 22 7/16 by midday but the busiest options, the June 20 calls, traded only about 300 contracts though their price rose 1 5/16 ($131.25) to 2 11/16 ($268.75).