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Halftime—Jon Najarian: Icahn Raising Stake Creates Options Stir In This Name

Monday, 20 Dec 2010 | 1:26 PM ET

After a filing showed renown investor Carl Icahn recently raised his stake in Chesapeake to 5.8 percent from 2.5 percent, shares of the nat gas producer went higher in trading Monday.

Chesapeake has seen "very strong activity" in the options market, said Jon Najarian of optionMOSNTER.com. By midday trading, there were roughly 52,000 calls bought. Typically, he said only 16,000 would have traded hands.

"A lot of folks are coattailing on Carl," Najarian noted. "He's not always right, but it's usually a good trade for a few days and there's people betting this will be another one of those days."

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AMERICAN EXPRESS DOWNGRADED

Credit card giant American Express caught a downgrade at Stifel Nicolaus on monday. The firm gave the financial services company a 'hold' from 'buy' rating, citing last week's fed proposal to limit credit card interchange fees to 12 cents per transaction.

Call of the Day: American Express Downgrade
Chris Bendler, an analyst at Stifel Nicolaus, tells the "Fast Money" traders why he downgraded American Express from a buy to a hold.

Chris Brendler, the analyst who made the call, said the fed proposal targets debit cards. Because the feds have taken a very pro-merchant stance, he said, credit cards will start losing share to debit cards. American Express doesn't offer debit cards and he doesn't think that will change any time soon, if ever.

Brendler likes the near-term fundamentals on American Express, but gave it a longer-term fair value of $41 a share.

What's the Trade?

"I'm not quite ready to throw this particular towel," said RiverTwice Research's Zachary Karabell of American Express. "Past experience suggests that the affluency of the AmEx customer base creates amazing balance for that business."

Najarian, on the other hand, thinks there's something to Brendler's points. He suggests waiting to buy AMX below $40 a share.

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AMAZON A BUY AMIDST HOLIDAY SHOPPING RUSH?

The world's largest online retailer, shares of Amazon traded higher on Monday after Comscore reported U.S. online holiday sales increased 12 percent from last year. Barclays also increased its price target on the stock to $195.

That's not an aggressive price target for Amazon , said Karabell. He wouldn't touch this stock on these valuations. Instead, he suggests FedEx as a proxy play because those who shop online have to have their products shipped to them somehow.

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CALL. THE CLOSE

Stuart Frankel's Steve Grasso thinks the market could close higher.

Both Kelly and Najarian are buyers of this market.

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Trader disclosure: On December 20, 2010, following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Zachary Karabell Owns (AAPL), (GOOG), (IBM), (GS), (C), (CSCO), (FCX), (RIMM), (FXI), (GE) and (BRCM). Jon Najarian owns (IBM), is short (IBM) calls. Jon Najarian owns (GS), is short (GS) calls. Jon Najarian owns (JPM), is short (JPM) calls. Jon Najarian owns (CME), is short (CME) calls. Jon Najarian owns (CBOE), is short (CBOE) calls. Jon Najarian owns (V), is short (V) calls. Jon Najarian owns (PCX), is short (PCX) calls. Jon Najarian owns (MEE), is short (MEE) calls. Jon Najarian owns (CHK), is short (CHK) calls. Jon Najarian owns (FCX), is short (FCX) calls. Steve Grasso owns (ASTM), (BA), (BAC), (BWC), (C), (CSCO), (JPM), (LIT), (LPX), (MHY). (NDAQ), (PFE), (PRST) and (S).

GE is the parent company of CNBC
NBC Universal is the parent company of CNBC

Checking Gartman and Tilson SOT's for disclosures

BRIAN KELLY
Accounts Managed By Kanundrum Capital Own (JPM)
Accounts Managed By Kanundrum Capital Own (WFC)
Accounts Managed By Kanundrum Capital Own (AKAM)
Accounts Managed By Kanundrum Capital Own (JEF)
Accounts Managed By Kanundrum Capital Own (SLV)
Accounts Managed By Kanundrum Capital Own (SWC)
Accounts Managed By Kanundrum Capital Own USD
Accounts Managed By Kanundrum Capital Own (CLF)
Accounts Managed By Kanundrum Capital Own (QCOM)
Accounts Managed By Kanundrum Capital Are Short The Yen
Accounts Managed By Kanundrum Capital Are Short The Euro

ZACHARY KARABELL
River Twice Capital Owns (CSCO)
River Twice Capital Owns (GS)
River Twice Capital Owns (MSFT)
River Twice Capital Owns (MA)
River Twice Capital Owns (FDX)
River Twice Capital Is Short (SMH)
River Twice Capital Is Short (SPY)
River Twice Capital Is Short (QQQQ)
River Twice Capital Is Short (XLF)

STEVE GRASSO
Stuart Frankel & Co and its partners own (AAPL)
Stuart Frankel & Co and its partners own (AMGN)
Stuart Frankel & Co and its partners own (BP)
Stuart Frankel & Co and its partners own (CUBA)
Stuart Frankel & Co and its partners own (GE)
Stuart Frankel & Co and its partners own (GERN)
Stuart Frankel & Co and its partners own (HPQ)
Stuart Frankel & Co and its partners own (HSPO)
Stuart Frankel & Co and its partners own (NWS.A)
Stuart Frankel & Co and its partners own (NYX)
Stuart Frankel & Co and its partners own (OPEN)
Stuart Frankel & Co and its partners own (PDE)
Stuart Frankel & Co and its partners own (PFE)
Stuart Frankel & Co and its partners own (PRST)
Stuart Frankel & Co and its partners own (RDC)
Stuart Frankel & Co and its partners own (TLM)
Stuart Frankel & Co and its partners own (XRX)
Stuart Frankel & Co and its partners own (SDS)
Stuart Frankel & Co and its partners own (UNM)
Stuart Frankel & Co and its partners are short (QQQQ)
Stuart Frankel & Co and its partners are short (AAPL)

ALEX HAMILTON
Hamilton has no disclosures.

CHRIS BRENDLER
Stifel, Nicolaus & Co. Is A Market Maker In (ADS), (CBOE), (AXP), (DFS), (NYX), (V), (CME), (CIT), (MA), (ICE), (COF), (NDAQ)
Stifel, Nicolaus & Co. Expects To Recive/Seek Investment Banking Compensation From (ADS), (NDAQ) In Next 3 Months

WHITNEY TILSON SOT
Funds Managed By Whitney Tilson Were Short (NFLX) On 10/29/10

DENNIS GARTMAN SOT
There were no disclosures on 12/1/2010

CNBC.com with wires.

  Price   Change %Change
AMZN
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ALXN
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CHK
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FDX
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