XL - XL Capital Ltd. – Bullish investors took aim at XL Capital put options in the January contract this afternoon. Shares of XL are slightly higher by less than 0.25% to stand at the current price of $16.68. Traders appear to have sold approximately 20,000 puts at the January 16 strike for a premium of 1.10 apiece. XL-optimists retain the full premium received on the sale as long as shares remain above $16.00 through expiration in January. The premium acts as a buffer in case shares in fact decline beneath the strike price by expiration. If the put options land in-the-money, short sellers may have an equivalent number of shares of the underlying stock put to them at $16.00 apiece. Investors will experience losses if shares fall through the effective breakeven price of $14.90.

WYNN - Wynn Resorts Limited – The owner and operator of casino resorts posted third-quarter earnings per share of 33 cents – a 33% decline in net income – sending shares 10% lower to $56.75. Wynn Resorts has now reported declines in profit for two consecutive quarters. WYNN’s lackluster earnings is weighing heavily on other casino operators such as Las Vegas Sands (-7.5% to $14.88) and MGM Mirage (-8% to $10.08) as of 10:30 am (EDT). Investors have exchanged 22,000 option contracts on WYNN.

BIDU - Baidu, Inc. – Shares of the Chinese language internet search provider are trading 13% lower as of 10:15 am (EDT) to stand at $376.56. The decline in shares seems to contradict the firm’s better-than-expected third-quarter earnings of $2.16 per share. However, investors were disappointed by Baidu’s forecast for fourth-quarter revenue, which the firm says will likely decline as they transition to a new internet advertising technology. Shares dropped as much as 18% to $355.71 while implied volatility tumbled 16% to 44% following earnings. Approximately 50,000 option contracts – 32% of existing open interest – changed hands by 10:30 am (EDT).

XHB - SPDR S&P Homebuilders ETF – A butterfly spread unfurled its wings in the November contract on the homebuilders ETF within the first 15 minutes of the trading session. Shares of the XHB are lower by 1.5% to $14.58. Perhaps the investor responsible for the trade is expecting shares to rebound by expiration next month. Stay tuned for a more in depth analysis of this transaction…