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Options in Motion: XLE

Traders buy puts on the energy ETF as oil prices retreat.
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The options market was quiet Tuesday ahead of the

Federal Open Market Committee


The CBOE Market Volatility Index, or VIX, technically a measure of implied volatility based on the

S&P 500

options but a commonly used gauge of fear in the market, was recently down 1% to 12.02. Meanwhile, the CBOE Nasdaq Volatility Index, which measures the implied volatility of the Nasdaq 100, was down 3% to 14.24.

As oil gave back some of its recent gains, the

Energy Select Sector

(XLE) - Get The Energy Select Sector SPDR Fund Report

fund saw put buyers. The December 50 puts have traded 17,500 times. The ETF was down 55 cents, or 1.02%, to $53.11.


(QCOM) - Get QUALCOMM Incorporated Report

had heavy call buying after the company was upgraded by Goldman Sachs from in-line to outperform. The October 45 calls have traded 4,700 times. The January 2006 45 calls have traded more than 16,500 contracts. The stock was up $1.41, or 3.3%, to $44.12.

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(DIS) - Get The Walt Disney Company Report

had a buyer of the October 22.5 calls 15,400 times. The calls were higher by 25 cents. Disney stock was up 25 cents, or 1.05%, to $24.15.


(MSFT) - Get Microsoft Corporation Report

saw the November 25/27.5 strangle trade 10,000 times. A strangle is when someone buys the downside puts and upside calls simultaneously. The buyer of this type of trade is hoping for a volatile move in the stock. The stock was up 11 cents, or 0.42%, to $26.11.

Apple Computer

(AAPL) - Get Apple Inc. Report

had call buyers and put sellers after Deutsche Bank initiated coverage on the stock with a buy and set a $60 price target. The October 55 and 57.5 calls have traded a total of 15,000 contracts. The January 2006 40 straddle traded 9,000 times. This is when someone buys the 40 calls and 40 puts simultaneously hoping a large price move in either direction of the stock. Apple was up 87 cents, or 1.65%, to $53.51.

Among financial stocks,

J.P. Morgan

(JPM) - Get JP Morgan Chase & Co. Report

had a buyer of the October 35 calls 6,700 times. The stock was up 33 cents, or 0.95%, to $34.92.

To view Mike Marino's video take on today's option action, click here.