Fiddling with an options play ahead of a company's earnings can be an expensive proposition, even more so these days for professional option investors.

Intel's

(INTC) - Get Report

earnings, for instance, are luring call-option buyers on Wednesday ahead of earnings due out after the close of trading Thursday. Investors who buy calls are expecting a positive earnings announcement to boost Intel's stock price and, naturally, the options' price.

In these times of 20-point daily moves for many stocks, however, that strategy gets riskier for professionals on the other side of such trades.

"I'm too shy to write

sell these things

options yet," said Jay Shartsis, option strategist with

R.F. Lafferty

in New York. "Usually at this point ahead of expiration, I would be a seller of these things. But stocks just don't seem to trade on fundamentals anymore."

With Intel shares up 3 13/16 to 93 1/2 at midday, its January 90 calls were among the most active on the trading floors Wednesday. The price of those calls was up 7/8 ($87.50) to 4 3/4 ($475) on volume of more than 4,000 contracts.

Those who thought more good things might be in store were looking at the out-of-the-money January 95 calls, which traded 3,300 contracts and jumped 1/2 ($50) to 2 3/8 ($237.50).

On the other side of the aisle this morning, few Intel puts traded, indicating that investors were expecting positive earnings, especially in the wake of a lofty 150 price target set for the company by

Credit Suisse First Boston

analyst Charlie Galvin on Tuesday and a rally in the shares.

The professional option traders who sell these aren't stupid; they will bid up prices ahead of earnings knowing that investors want in ahead of the news. But "no longer can we safely bet that the stock price will come down after earnings," Shartsis said. Those who sell (or write) such options are vulnerable to a large move in a stock that makes the options they sold even more expensive and obligates them to fulfill their end of the contract at a loss.

Traditionally, stock-option price speculation heightens around a potentially important short-term move in a stock. Traders are happy to sell any options to investors because they are betting on the old axiom that investors will buy the rumor and sell the fact, thus leaving the options sold to expire worthless to the buyers.

Other old market truths continue to be cast off like an 8-track out of the

Chevy

.

After all, both

America Online

(AOL)

and

Time Warner

(TWX)

shares have nose-dived since the supposed merger deal of the new century was announced Monday.

"Did anyone downgrade AOL or TWX even simply on a price basis? No, because there are no price targets anymore," Shartsis sniffed.

January 70 puts on AOL were trading at 2 ($200) at midday

Monday; by Wednesday, same-said January 70 puts on AOL were trading at 9 ($900).

A put option is a contract between buyer and seller that gives the buyer, or owner, the right to sell stock by the third Friday of the expiration month at a set price. That means the value of a put option on AOL betting the stock will hit 70 by January's expiration next Friday has more than quadrupled in price.

AOL stock has slumped to around 62 from its open of around 80 on Monday. Time Warner has fallen to 81 3/8 from roughly 102 on Monday. Didn't Wall Street used to love this deal?

Elsewhere in option trading,

Home Depot

(HD) - Get Report

options were active for the second day in a row.

On Wednesday, the place to be was the January 63 3/8 call contract. About 1,000 contracts in that strike price traded for 7/8 ($87.50) each; the stock price, meanwhile, was down 9/16 to 61.

Someone was giving up the ghost on

Interdigital Communications

(IDC)

options, with what appeared to be one seller getting out of the February 80 calls at a price of 1 ($100), down 1/4 ($25).

And another outfit

TSC

has

investigated extensively,

Sunrise Technologies

(SNRS)

, seems to have found a new round of wide-eyed admirers after its announced completion of a new round of financing.

With Sunrise stock up 1 1/4 to 12 today on the news, a big trade in the January 12 1/2 calls crossed at 3 3/8 ($337.50), up 7/8 ($87.50) and accounted for nearly 1,600 contracts.