Options traders followed

Lehman Brothers

Wednesday when it came to

Check Point Software

(CHKP) - Get Report


After Lehman downgraded the stock to buy from strong buy, investors began chasing Check Point


options, which are rights but not obligations to sell the underlying stock. Check Point is an Israel-based company that makes firewall protection software. In making its move, Lehman cited increasing competition from


(CSCO) - Get Report

and other virtual private network providers amid the current economic slowdown.

The Check Point June 55 puts traded about 3,100 contracts on an open interest of 5,982. The premium rose as high as $8.10 ($810 per 100), but it's currently listed at $7.60 ($760 per 100). The June 65 puts traded a little more than 2,000 contracts on an open interest of 2,373; the premium on those puts is listed at $15 ($1,500 per 100).

One trader attributed much of the volume to "a large three-to-two spread." A spread is a combination of long and short positions in options of the same underlying stock. The positions have different strike prices (as in this case) or different expiration dates. By three-to-two, the trader is referring to 3,000 June 55 puts and 2,000 June 65 puts. Essentially, the investor is buying the June 55 puts and selling the June 65 puts. According to Paul Foster, editor and option strategist at


, the investor is betting the stock will either sit where it is or fall.

However, Check Point does have its defenders, including

Goldman Sachs

, which has the stock on its recommended list. According to


, Goldman points to the confusion concerning the company's relationship with


(NOK) - Get Report

, which has been rumored to be building its own VPN product, complete with firewall protection. If this were the case, Nokia would no longer require Check Point's services. However, Goldman contends that Nokia has no intention of building its own firewall software product to replace Check Point, according to Briefing.

After being down 9% earlier today, Check Point closed off 72 cents, or 1.3%, at $54.19.

Meanwhile, the

Chicago Board Options Exchange

volatility index, or VIX, is down 9.3% to 24.79, falling below 25 for the first time since Feb. 16. The VIX measures the average implied volatility of a series of options on the

S&P 100

index and serves as a gauge of investor fear. A lower figure signals less fear.