Oil Option Plays Replace the Net Bets

Plus, options in Baker Hughes, still rumored as a possible merger player, remained active ahead of its earnings report.
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All quiet on the Internet front. And so it was with the options market Friday, one day after a vicious selloff took the wind out of technology and Internet stocks, especially.

Instead, traders seemed to be looking for speculative alternatives. One spot was the

Philadelphia Oil Services

index, or the OSX, where call orders trickled in Friday morning. "Things were jumping a bit" in the OSX, said a Philadelphia-based floor trader. The index itself was up 1.30 to 81.58, and August 85 calls gained 1 3/8 ($137.50) to 2 5/8 ($262.50).

Baker Hughes

(BHI)

dominated early-morning trading ahead of earnings expected to be released Monday. The options had been active earlier in the week as well.

The oil-services company has remained on the market's short list as either a potential acquisition target or a buyer in a consolidating industry, and the stock was up 3/4 to 34 11/16 Friday.

August 37 1/2 calls, which are generally viewed as bullish bets on a stock by those who purchase them, were up 1/16 ($6.25) to 1/2 ($50) on fairly thin volume, and August 37 1/2 puts, or bets the stock will fall by those who buy the options, had cracked down 2 5/8 ($262.50) to 3 3/4 ($375) on volume of 525 contracts, outstripping open interest of 52 contracts.

Steris

(STE) - Get Report

, the pharmaceutical company that got some heavy

put-buying ahead of its earnings release Thursday, made traders look smart by reporting disappointing earnings.

Options market speculation through the heavy put-buying was pointing in that direction, and halfway through trading Friday, the stock was down 2 13/16 to 13 5/16, a new all-time low.

The company reported first-quarter earnings of 14 cents a share, compared with a Street estimate of 23 cents and the year-earlier period's 21 cents.

On Wednesday, Steris August 17 1/2 puts were going for 1 1/2 ($150), and by Friday, those 17 1/2 puts were at 3 7/8 ($387.50).