Options in Motion: Harrah's

Traders buy puts as Katrina threatens casinos.
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Option activity was on the light side as August dragged toward an end.

The CBOE Market Volatility Index (VIX), which is based on the implied volatility of the

S&P 500

options and is used as a gauge for fear in the market, was unchanged at 13.70. The CBOE Nasdaq Volatility Index (VXN), which measures the implied volatility of the Nasdaq 100, was recently up 0.33% to 15.42.

In healthcare stocks,

Pfizer

(PFE) - Get Report

had some sellers of calls and buyers of puts. The September 25 and 27.5 puts have traded a total of 5,000 contracts. The December 22.5 puts have traded 11,500 contracts.

Harrah's Entertainment

(HET)

saw put buying in early action. The company has the highest exposure of the nine major casinos in Hurricane Katrina's path. The September 70 puts traded over 1,500 contracts.

The hurricane is expected to cost insurers billions. Investors sold calls and bought puts as many of the insurance stocks traded lower.

Allstate

(ALL) - Get Report

saw its September 55 calls trade lower by 37.5%. The September 55 puts traded 2,900 times which is just shy of the amount of open interest for that strike. The October 50 and 55 puts have traded a total of 3,000 contracts.

Insurer

Hartford Financial

(HIG) - Get Report

saw its September 70 calls trade lower by 25% and September puts trade higher by 50% on very light volume.

Among individual names,

McDonald's

(MCD) - Get Report

saw put buying in October as the stock drifted lower by 1.25%. The October 30 puts traded 7,700 contracts, while the 32.5 puts have exchanged hands 3,700 times.

Applied Material

(AMAT) - Get Report

saw call buying in September. The 17 calls have traded 2,000 times and the 17 calls have traded over 6,400 times.