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There was a time not long ago that traders played stocks such as


(IBM) - Get International Business Machines Corporation Report



(GE) - Get General Electric Company Report

to make money when they rose. These days, it's the traders who bet on them falling before the end of the year who are counting their gains.

With Friday the last day to take profits and losses in 2000 for tax purposes, options traders ratcheted up the volume in put contracts today, taking in gains in some large-cap stocks including IBM, GE and


(MSFT) - Get Microsoft Corporation Report


Traders came to those companies early and often, with each showing large put option volume as the stocks slipped some from Tuesday's levels.

IBM, which was down 25 cents to $84.56 at midday, saw more than 5,000 of its January 110 puts trade. While the price of those options rose 2 3/8 ($237.50) to 25 1/4 ($2,525),

CIBC World Markets

senior options strategist Michael Schwartz said he didn't think the action reflected fresh money coming into the market.

"Most of what you're seeing is deep in-the-money volume, so it's likely traders are taking their profits in those positions," he said. He noted that on Nov. 1, those same IBM January 110 puts were trading at just 14 1/4 ($1,425), so today's price move brought it to a return near 100%. That would make it an opportune time to sell those options back for a little post-Christmas bonus.

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With options prices running slightly high, another trader seeking some protection apparently sold roughly 3,200 of Microsoft's January 40 puts to finance part of the purchase price of about 3,300 January 45 puts. The software giant's stock was trading down 56 cents to $46.34 at midday.

The idea behind such a trade would be to take in roughly $400,000 for selling puts less likely to end in the money (with Microsoft at or under $40-a-share) to offset the $1 million cost of buying ones, the January 45 puts, that are more likely to end in the money.

Still, for investors concerned about the overall market's prospects, Schwartz sees an opportunity for what he calls the "Insurance Against Being Bushwhacked" strategy.

Investors who want to stay broadly invested in the market can buy a

S&P 500 Index Trust

(SPY) - Get SPDR S&P 500 ETF Trust Report

but an option on the reduced S&P 500 Index.

With the SPDR trading around 132, Schwartz took aim at the December 140 put option that expires in 2003. That option cost roughly 17 ($1,700), but was eight points in the money.

That put option will increase if the value of the SPDRs decreases. If the market rises 25%, the SPDR position will realize a roughly $3,300 gain and a $420 dividend gain against the loss of $1,700 for the protective options positions. It's a risk Schwartz said he's comfortable with.

"Protective puts are a core strategy, and this is a position I'd hold through the life of the option," he said.

There was heavy bullish trading in



options this morning for no apparent reason.

With its shares trading up just 44 cents to $20.88, more than 12,000 of its January 20 calls traded. With open interest on those particular options at merely 436 contracts before today's action, the heavy volume represents a major infusion of capital into an apparently long position.

The January 20 calls were trading at 2 1/8 ($212.50), up 9/16 ($56.25) on the day.