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Today’s tickers: WERN, MDVN, GT, XRX, SLE, AMGN, ESI, EBAY, FFIV & SLE

WERN - Werner Enterprises, Inc. – The truckload freight services firm edged onto our ‘hot by options volume’ market scanner due to bearish trading in the June contract. Shares of WERN slipped 0.5% lower this afternoon to $20.22. One investor initiated a ratio put spread by purchasing 6,000 put options at the June 20 strike for 2.25 apiece, and by simultaneously selling 12,000 puts at the lower June 17.5 strike for 1.10 each. The net cost of the trade is reduced to just one nickel per contract. The trader is probably aiming to protect the value of a long position in shares of WERN through expiration. Downside protection will kick in if shares decline more than 27 cents from the current price given the effective breakeven point on the trade at $19.95.

MDVN - Medivation, Inc. – Long-term bearish activity in the June 2010 contract suggests one investor may be bulking up on downside protection in case shares of biopharmaceutical company, Medivation, Inc., continue to decline. The stock is currently trading less than 0.5% lower to stand at $26.51. A put spread was established through the purchase of 10,000 puts at the June 22.5 strike for 7.80 apiece, marked against the sale of 10,000 puts at the lower June 12.5 strike for 1.87 each. The net cost of the pessimistic play amounts to 5.93 per contract. The spread was most likely initiated by an investor holding a long position in the underlying shares. Putting on the protective stance shields the investor from losses beneath the breakeven point at $16.57. However, if the trader is in fact long the stock, he will suffer a 38% decline in the value of MDVN before downside protection kicks in at the breakeven price described. An alternate scenario is that the investor does not hold a long position in MDVN. If this is the case, the trader is uber-bearish and expects to garner profits from significant declines in Medivation through expiration in June.

GT - The Goodyear Tire & Rubber Co. – Option traders populated the November contract on GT with bullish plays this afternoon. Shares added more than 2.5% during the session to arrive at the current price of $17.83. Some investors targeted the now in-the-money November 17.5 strike to purchase 3,800 calls for an average premium of one dollar apiece. Other traders looked to the higher…

Today’s tickers: AXP, EFA, XL, LXK, AVP, WERN, ISRG & CHK

AXP – An investor hoping for a medium-term rally in AXP put on a bullish reversal in the October contract. Shares of the global payments and travel company are currently trading a wee-bit higher, up 0.25% to $28.94. The reversal involved the sale of 7,500 puts at the October 26 strike price for a premium of 1.45 each spread against the purchase of 7,500 calls at the higher October 31 strike for 1.85 apiece. The investor paid a net 40 cents for the transaction. He will realize profits on the trade if shares can rally 9% higher to breach the breakeven point at $31.40 by expiration. Interestingly, we essentially observed the antithesis of the trade we just described, last Friday July 17, 2009. Rather than getting long call options, an investor last week sold calls at the October 30 strike to buy put options at the October 25 strike. The direction in which the price of the underlying moves over the next few months will determine whether today’s bullish reversal or last week’s risk reversal result in profits to those individuals responsible for the trades. – American Express Co.

EFA – Shares of the exchange-traded fund have dipped 0.25% to stand at $47.63 this afternoon. The EFA caught our attention after a couple of bullish reversals were established in the December and January 2010 contracts. One investor sold 5,000 puts at the December 49 strike price for a premium of 3.90 apiece in order to purchase 5,000 calls at the same strike for 2.72 each. The trader received a net credit of 1.18 per contract for the transaction. Additional profits are available if shares rally above $49.00 by expiration at the conclusion of 2009. Another bullish-reversal was enacted at the January 49 strike price, although the trade involved the sale of 1,100 puts against the purchase of 1,100 calls for a net credit of 1.53 to the investor. – iShares MSCI EAFE Index ETF

XL – The provider of insurance and reinsurance coverage edged onto our ‘hot by options volume’ market scanner after a large-volume transaction was initiated in the January 2010 contract. Shares of XL are currently off by 2% to $12.53. At first glance, the 20,000 put options purchased at the January 5.0 strike price for 35 cents apiece, smells of bearish. However, it appears that the trade was tied to stock and is…

JP Morgan is upgrading Werner Enterprises (NASDAQ:WERN) to Overweight from Neutral with a $24 price target (prev. $18). According to the analyst, WERN is one of the names within their coverage space that reflects low expectations and potential for significant upside surprise. They believe that WERN’s 2Q results are likely to show significant traction on cost-cutting initiatives while it provides attractive leverage to a turn in the economy in the medium term. They also believe the combination of low expectations and traction on cost cutting supports an attractive reward to risk profile even if the TL cycle turn takes time. Low expectations support attractive[More...]

By William Patalon III Executive Editor Money Morning/The Money Map Report As a result of the U.S. credit crisis – and the near-shutdown of the commercial lending market – ... Money Morning is here to help investors profit handsomely on this seismic shift in the global economy. Money moves markets. But Money Morning lets you move first. <img src="http://feeds.feedburner.com/~f/USMoneyMorning?i=XAm8M"[More...]