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Corning Inc. (NYSE:GLW) – A massive put spread purchased on the glass maker this afternoon appears to be the work of an investor positioning for the price of the underlying stock to decline ahead of August 2011 expiration. Corning’s shares increased 0.55% this afternoon to arrive at $22.28 by 1:40pm in New York. The price of the underlying stock has climbed more than 51.6% since August 27, 2010, to touch a 52-week high of $23.43 just last Friday.

The large bearish stance employed in Corning put options today is perhaps a sign that at least one player believes the next six months may not be as fruitful for GLW investors as the last six. The trader purchased 28,000 puts at the August $22 strike for a premium of $1.83 each, and sold the same number of puts at the lower August $18 strike at a premium of $0.56 apiece. Net premium required to buy the spread amounts to $1.27 per contract, thus positioning the investor to profit should Corning’s shares drop 7.0% from the current price of $22.28 to breach the effective breakeven point on the downside at $20.37 by August expiration day. Maximum potential profits of $2.73 pad the put player’s wallet in the event that shares in GLW plummet 19.2% to trade below $18.00 before the contracts expire in August. Corning’s shares last traded below $18.00 back on December 1, 2010.

Expedia, Inc. (NASDAQ:EXPE) – Contrarian options traders are initiating bullish plays on the online travel company this morning in the face of a more than 18.25% decline in Expedia’s shares to an intraday low of $20.99. Bullish strategists established near- and long-term positions that suggest the firm’s earnings miss has been priced in to its shares. Some traders are betting the stock is unlikely to fall much further, while others are initiating outright bullish bets that Expedia’s shares will recover somewhat in the next few months.

Shares in EXPE dropped after the company posted fourth-quarter profits of $0.32 a share, missing the average forecast of $0.36 a share, following the close of trading on Thursday. Investors exchanged more than 23,450 put options at the March $20 strike in the first half of the session on zero lots of open interest. It looks like the majority of the puts were sold for an average premium of $0.33 apiece. Put sellers keep the full premium on the transaction as long as Expedia’s shares exceed $20.00 through March expiration.

Meanwhile, trading in longer-dated call and put options paints a more bullish picture for Expedia in the coming months. One player established a three-legged transaction, selling 2,000 puts at the April $19 strike for a premium of $0.40 each, buying the same number of calls up at the April $22 strike at a premium of $0.90 per contract, and selling 2,000 calls at the higher April $24 strike for a premium of $0.30 apiece. Net premium paid to initiate the transaction amounts to $0.20 per contract.

The investor responsible for the spread stands prepared to make money in the event that EXPE’s shares rally 5.8% off today’s low of $20.99 to surpass the average breakeven point to the upside at $22.20 by April expiration. Maximum potential profits of $1.80 per contract are available to the trader should shares surge 14.3% to exceed $24.00 before the options expire in April. Options implied volatility on Expedia is lower by 14.2% to stand at 33.53% as of 12:30pm in New York.

Office Depot, Inc. (NYSE:ODP) – Shares in the global supplier of office products popped up 3.1% this afternoon to an intra-session high of $5.98 on unconfirmed rumors that the BlackBerry (RIMM) PlayBook tablet will be available at Office Depot. Investors speculating the shares in ODP will continue to rise purchased around 2,200 calls at the February $6.0 strike for an average premium of $0.13 each.

Options volume in the name was heaviest, however, out at the March $6.0 strike where more than 8,500 calls have changed hands on previously existing open interest of 1,651 contracts. It looks like most of the calls, roughly 7,700 of them, traded were picked up by bulls for an average premium of $0.36 apiece. Investors long the calls start making money if Office Depot’s shares rally another 6.35% over today’s high of $5.98 to trade above the average breakeven price of $6.36 ahead of expiration day next month. Options implied volatility on the stock lifted 8.6% to 60.52% by 1:30pm.

Tesoro Corp. (NYSE:TSO) – The San Antonio, Tex.-based oil refining firm popped up on our "hot by options volume" market scanner today due to bullish activity in February contract calls. Shares in Tesoro Corp. increased as much as 2.3% at the start of the session to hit an intraday- and new 52-week high of $22.01, but currently stands at around $21.82 as of 12:40pm in New York. Some reports out this morning are citing renewed takeover chatter as a catalyst for Tesoro’s rally.

More than 7,800 call options changed hands at the February $22.5 strike on open interest of 2,492 contracts. It appears the majority of the calls were purchased for an average premium of $0.24 a pop by investors positioning for the price of the underlying to extend gains ahead of expiration day next week. Call buyers make money if Tesoro’s shares increase another 3.3% over today’s high of $22.01 to surpass the average breakeven point at $22.74 by February expiration.

Source: Friday Options Brief: GLW, EXPE, ODP & TSO