Market pros were again seeing some investor caution Wednesday, something they were worried they weren't seeing last week. Two days of heavy selling tend to do that to investors.

Perhaps fearing another late-day sell session, options players were taking a walk on the put side, driving the put/call ratio 38% higher since Friday. In addition to put-hedging and outright speculation that stocks would fall further, investors were selling back some calls while they still carried some value.

Scott Fullman, chief options strategist at

Swiss American Securities

, says the

Dow's

more than 500-point drop this week coupled with

Federal Reserve

Chairman

Alan Greenspan's

comments today that banks were getting lax in their lending didn't add enthusiasm to anyone's investing plans. "I think people are getting very cautious and may be willing to wait this all out," Fullman said.

As a result, some of the most active options today weren't the tech favorites, but rather the staid blue-chips, among them

General Motors

(GM) - Get Report

and

Citigroup

(C) - Get Report

. "The thing yesterday with

Procter & Gamble

(PG) - Get Report

really spooked a lot of people," Fullman added.

Citigroup's March 50 calls, which were still in-the-money though the stock was down slightly to 50 5/16, off 1/16 today, traded more than 10,000 contracts against similar open interest. The move may have resulted from investors closing out the contracts ahead of next week's expiration, while they still held some value.

General Motors, on the other hand, saw heavy buying in its far off puts. About 8,000 contracts in the company's 2002 January 65 puts moved as the stock remained steady around 75. The move was likely a long-term hedge on further downside in the stock, which has ticked lower by 12% since February, trading at around 74 3/4 at midday Wednesday.

Another nontech giant,

International Paper

(IP) - Get Report

, which has fallen like an old-growth redwood since hitting a high of 60 in January, was seeing some bottom-feeding buying today after the stock hit a new low of 32 7/8 on Tuesday. The buying bounced the stock 6% to 35 1/2, up 2 1/8, and drove options players into the company's puts, probably as protection for their stock purchases.

The July 30 puts moved more than 10,000 contracts against just 284 contracts in open interest, and traded for around 2 ($200). It's likely that the puts were a hedge on buying in the stock, or possibly a way for the put-buyer to speculate that the stock will drop below that strike by summer.

Even nontech was seeing some speculative plays.

Sara Lee

(SLE)

, which also hit a new low yesterday at 13 3/8, saw 3,200 contracts in its March 17 1/2 move at 1/16, or $6.25 each, move against lesser open interest.

The cheap play bets the cake-maker's stock will go up 20% by next Friday when the options expire. Sara Lee was up to 14 3/16, climbing 1 3/16 today.