Skip to main content

The recent solitude and complacency in the market which had some market pros cautious regarding

Nasdaq Composite Index prospects proved prescient, considering this week's dreadful action in technology stocks.

And according to some pros, recent options action isn't giving them the signal that it's a good idea to jump in just yet either.

Hedge fund manager Rob Sorrentino, who runs

Sorrentino Asset Management

in Naples, Fla., said market pros were waiting to see how much the Nasdaq was going to fall and that few were playing a bottom just yet.

He said the market needs to fall more or see a reversal to get people excited and involved. Sorrentino also noted that the options market was subdued because it was the week after expiration (July equity and index options expired last week). "There are no plays out there," he said.

The Nasdaq Composite Index and

Nasdaq 100

have been sliced up in recent sessions as those gauges take a breather from their late-May and June gains. Much of the weakness lately has come thanks to jitters about profit growth in the technology sector, in which the aforementioned indices are heavily weighted.

The Comp was off 104, or 2.6%, to 3883, while the Nasdaq 100 was down 88, or 2.3% to 3730. The

Nasdaq 100 unit trust

(QQQ) - Get PowerShares QQQ Trust Ser 1 Report

, was off 2 9/16 to 93 1/16.

Recently, some market players were cautious about the market's prospects because investors seemed complacent, as evidenced by the low levels on the

Chicago Board Options Exchange Volatility Index

Scroll to Continue

TheStreet Recommends

and slight volatility on options on the QQQ. Both indicators are still relatively low, leading contrarian investors to suggest more downside may be on the way.

Contrarian traders generally like to take the opposite bet of where most of the market is leaning.

An earnings warning Thursday from mobile-phone leader


(NOK) - Get Nokia Oyj Report

has led to a

collapse in its stock and dragged down other mobile-phone makers, helping punish tech stocks in general.

Nokia options were seeing a lot of action as new positions were established in strike prices that used to be way out of the money. Shares of Nokia were down 13 9/16 to 42 1/4. Options-wise, the August 45 puts were active on the

Philadelphia Stock Exchange

, with nearly 6,400 contracts trading. The August 45 puts were trading up 3 9/16 ($356.25) to 4 1/8 ($412.50). Open interest in the August 45 puts as of Thursday's close stood at 4,419.

An old favorite in the options-market takeover rumor mill has turned up again for another command performance:

Ryder System

(R) - Get Ryder System, Inc. Report


Options prices and volume have both risen lately on Ryder, which isn't anything particularly new, options and equity-market participants note.

Ryder, a transportation and logistics company, has seemingly been the subject of takeover chatter off-and-on for what seems like at times forever. One money manager, who declined to be identified, and who is long shares of Ryder, quipped recently that people on the


Ryder message boards have been saying Ryder's going to get taken over seemingly every month over the last 48 months and they're 0-48, he said.

The money manager, however, said that it was no secret that large shareholders in the company have said that Ryder would be a highly valuable asset to a number of companies.

Shares of Ryder were surging Thursday, up 1 1/16, or 5.2%, to 21 5/8.

Interest Thursday in Ryder options was heaviest in the August 20

calls and August 22 1/2 calls. The

in-the-money August 20 calls were trading up 1 ($100) to 3 ($300), while the

out-of-the-money August 22 1/2 calls were up 3/4 ($75) to 2 ($200). Volume was heaviest in the August 22 1/2 calls, where 1,291 contracts have traded, compared to open interest of 12,029 as of Wednesday's close. The trading in the calls could be investors opening new positions or closing out old ones.

In a report Thursday, the Skupp-Seidman options team at

Miller Tabak

noted the continued call buying in Ryder, as the duo also pointed out in a report Wednesday.

Since logging in a recent low intraday of 17 15/16, shares of Ryder have rallied 21% as of Thursday's intraday price of 21 5/8.