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Options Action: Whirlpool

With shares down about 20% over the past 3 months how should you game Whirlpool in the wake of bullish options action?

Mike Khouw of Cantor Fitzgerald tells the desk, "The upside calls in September were all very active on Monday on a variety of strikes."

He interprets the action as investors speculating that Whirlpool may be another takeover candidate. "I usually try to fade this kind of activity.”

As a result he recommends an October risk reversal. Details follow:

Oct 75/85 risk reversal.
- Sell the Oct 75 puts @ $4.00, buy the Oct 85 calls @ 2.75.

Learn more about this play. Watch the video now!







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Trader disclosure: On Aug 23, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour owns (AAPL), (BX), (GOOG), (POT); Cortes owns (FCX), (SFD); Cortes owns (BHP); Cortes owns Crude Oil; Cortes is short (SPY); Cortes is short (XLF); Cortes is short Japanese Yen; Cortes is short U.S. Treasuries; Finerman owns (GOOG); Finerman’s Firm owns (HPQ); Finerman’s Firm owns (POT) calls; Finerman’s firm owns (WMT); Finerman owns (MOS); Finerman's firm is short (IJR); Finerman's firm is short (MDY); Finerman's firm is short (SPY); Finerman's firm is short (IWM); Finerman’s firm owns S&P 500 puts; Finerman’s firm owns Russell 2000 puts; Terranova owns (AXP), (C), (BMO), (V), (POT), (OXY), (GLD), (FCX), (APA), (SU), (XBI)

For Joe Terranova
Terranova is chief market strategist of Virtus Investment Partners, LTD.
Virtus Investment Partners own more than 1% of (ABAX)
Virtus Investment Partners own more than 1% of (ALK)
Virtus Investment Partners own more than 1% of (AMKR)
Virtus Investment Partners own more than 1% of (CASS)
Virtus Investment Partners own more than 1% of (CSVI)
Virtus Investment Partners own more than 1% of (XLY)
Virtus Investment Partners own more than 1% of (XLP)
Virtus Investment Partners own more than 1% of (DRYS)
Virtus Investment Partners own more than 1% of (EXR)
Virtus Investment Partners own more than 1% of (XLI)
Virtus Investment Partners own more than 1% of (IGE)
Virtus Investment Partners own more than 1% of (LDR)
Virtus Investment Partners own more than 1% of (LPHI)
Virtus Investment Partners own more than 1% of (XLB)
Virtus Investment Partners own more than 1% of (MGRC)
Virtus Investment Partners own more than 1% of (NRCI)
Virtus Investment Partners own more than 1% of (DBV)
Virtus Investment Partners own more than 1% of (SUBK)
Virtus Investment Partners own more than 1% of (XLK)
Virtus Investment Partners own more than 1% of (XLU)
Virtus Investment Partners own more than 1% of (WDFC)
Virtus Investment Partners own more than 1% of (YDNT)

For Brian Kelly
Accounts managed by Kanundrum Capital own U.S. Dollars
Accounts managed by Kanundrum Capital own Swiss Franc
Accounts managed by Kanundrum Capital own (GLD)
Accounts managed by Kanundrum Capital own (GDXJ)
Accounts managed by Kanundrum Capital own (ANDE)
Accounts managed by Kanundrum Capital own (TBT)
Accounts managed by Kanundrum Capital are short the U.K. Pound
Accounts managed by Kanundrum Capital are short the Peso
Accounts managed by Kanundrum Capital are short (XLF)
Accounts managed by Kanundrum Capital are short (AFL)
Accounts managed by Kanundrum Capital are short (MCO)
Accounts managed by Kanundrum Capital are short (IAI)

Anthony Scaramucci
SkyBridge Capital and Scaramucci own (GD)

Mike Khouw
***No Disclosures***

Jason Trennert
***No Disclosures***

Nishu Sood
Deutsche Bank owns 1% of more than any class of common equity of (TOL)
(TOL) is an investment banking client of Deutsche Bank

Dan Eggers
Credit Suisse provided investment banking services to the subject company (CMS) within the past 12 months.

Credit Suisse has received investment banking related compensation from the subject company (CMS) within the past 12 months.

Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject company (CMS) within the next 3 months.

Credit Suisse provided investment banking services to the subject company (PCG) within the past 12 months.

Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject company (PCG) within the next 3 months.

Credit Suisse provided investment banking services to the subject company (SO) within the past 12 months.

Credit Suisse provided non-investment banking services, which may include sales and trading, to the subject company (SO) within the past 12 months.

Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject company (SO) within the next 3 months.

Credit Suisse has received compensation for products and services other than investment banking services from the subject company (SO) within the past 12 months.

Credit Suisse provided investment banking services to the subject company (PGN) within the past 12 months.

Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject company (PGN) within the next 3 months.

CNBC.com with wires.

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