By Jud Pyle, CFA, chief investment strategist for the Options News Network

We saw call-selling across HMO stocks

Humana

(HUM) - Get Report

,

UnitedHealth Group

(UNH) - Get Report

and

Cigna

(CI) - Get Report

Wednesday, suggesting some investors see a cap, or ceiling, to the upside in HMO stocks as Republican representatives continue to express their side of the health care reform debate.

Looking at the HUM Nov. 32 calls, approximately 9,300 contracts crossed the tape yesterday. These calls, which closed down 20 cents, were home to open interest of 209 contracts heading into Wednesday's trading, suggesting yesterday's volume is very likely to translate as new positions. HUM shares closed up 6 cents to $28.34 yesterday.

Taking a look at the CI Oct. 25 calls, almost 15,000 contracts changed hands yesterday. The Oct. 25 calls were home to open interest of 22,000 yesterday, according to ONN.tv's Sidewinder report. A customer sold 3,500 Oct. 25 calls for $2.30 per contract in Wednesday morning trading, which means this trade will make money if these calls expire below $27.30 (the strike price plus the premium collected) come October expiration. CI shares closed up 30 cents to $21.84 last night.

More than 14,000 UNH Dec. 27 calls hit the tape Wednesday, the bulk of which were sold to open. These calls, which declined 30 cents on the day, were home to open interest of 5,711. The investor is betting that UNH shares will not climb much higher than $27 come December expiration. UNH shares closed at $24.02 on Wednesday, unchanged for the session.

Yesterday, HUM, CI and UNH continued rallying as they have since early March. Investors hoping to take profits in these stocks are not necessarily bearish, but it's interesting that they could be predicting a top to just how far these stocks can run.

Jud Pyle is the chief investment strategist for Options News Network and the portfolio manager of TheStreet.com Options Alerts. Click here for a free trial for Options Alerts. Mr. Pyle writes regularly about options investing for TheStreet.com.

Jud Pyle, CFA, is the chief investment strategist for Options News Network. Pyle started his career in finance in 1994 as a derivative analyst with SBC Warburg. After four years with Warburg, Pyle joined PEAK6 Investments, L.P., in 1998 as an equity options trader and as chief risk officer. A native of Minneapolis, Pyle received his bachelor's degree in economics and history from Colgate University in 1994. As a trader, Pyle traded on average over 5,000 contracts per day, and over 1.2 million contracts per year. He also built the stock group for all PEAK6 Investments, L.P. hedging, which currently trades on average over 5 million shares per day, and over 1 billion shares per year. Further, from 2004-06, he managed the trading and risk management for PEAK6 Investments L.P.'s lead market-maker operation on the former PCX exchange, which traded more than 10,000 contracts per day. Pyle is the "Mad About Options" resident expert. He is also a regular contributor to "Options Physics."