The options market saw some profit-taking Monday as investors took advantage of last week's run-up in stocks to sell their front-month calls and pocket some cash.

The recent tech-led surge that saw the


flirt with 5000 Friday took a slight breather today, giving options strategists a chance to gather their thoughts. "Profit-taking is the rule of the day," said Michael Schwartz, options strategist for


. Schwartz said he is seeing some people sell off some of their March calls as a slight hedge against any turn in their runaway stocks. "It's all happening in the March calls." The March calls expire March 17.

For example,



, the Internet holding company, saw its in-the-money March 115 calls trade 6,500 contracts at 32, or $3,200 per contract. The move was likely an investor taking money off the table as the options climbed along with the underlying stock. The options were up almost 45% as the stock climbed 11 7/8 to 145 15/16.

CMGI was likely moving because


, which is primarily owned by CMGI, announced a plan to supply the U.K. with reduced-cost Internet service.

This kind of trading wasn't restricted to Net stocks.


(DIS) - Get Report

saw its in-the-money April 32 1/2 calls trade 5,200 contracts at 4 5/8, or $462.50 per contract, as an investor cashed them out. Disney's stock, which recently has been recovering, was at 35 7/8, down 5/8, today.

In addition to the usual action in the tech favorites, such as




America Online


, there was a new, albeit small, wrinkle to watch. Biotech companies that have seen massive run-ups in the past few weeks were seeing some isolated action on the put side. The

Amex Biotech Index

was up 4.5% today, hitting a new intraday high of 793.2, up 34.1.

Schwartz said he has noticed investors buying far-month out-of-the-money puts as a sort of stop-loss measure. "These stocks are so volatile that if you put in a stop-loss order, the stock could drop, trigger the order then finish the day on the upside," he explained. "You can get really whipsawed." To avoid that, he suggested buying these puts on such momentum stocks like biotechs.

A stop-loss order would allow the investor to preset a price at which to sell. If the stock falls below that price, the stock is automatically sold. By buying puts, the investor agrees to sell the stock at the level of the strike price, but since the option expires months away, he or she is protected from the daily yo-yo momentum of the stock.

For example,

Protein Design Labs

(PDLI) - Get Report

has seen a 270% surge in its stock over the past month.

Today, with the stock at 314, up another 32 5/8, some investors were buying the August puts in the 200 and 260 strike price. Although the puts were pricey, at 25 1/2 and 53, respectively, Schwartz said it may be better to pay that premium rather than lose the stock on a big price swing.