Options traders appear to be setting up for a bullish move on Host Hotels & Resorts Inc. (HST). Traders plowed into 2,416 new call option contracts -- 5.39 times the average volume -- on the stock on Tuesday. And we know that traders were eager to get into this trade because 96% of the trades came in on the ask price.

Host Hotels has been consolidating in what looks like a bullish pennant for the past few months. The stock closed Tuesday at $13.97, down 3.85% during the past month.

Option traders also look like they are preparing for a bearish move on Leucadia National Corp. (LUK). Traders bought 1,504.00 new put option contracts -- 5.88 times the average volume -- on the stock. A full 100% of these trades also came in on the ask price.

The stock closed Tuesday at $22.69, up 5% during the past month.

Avis Budget Group (NYSE: CAR - option chain) stock traded lower Wednesday after the company said a proposed offering of $250 million in notes could reduce its earnings per share. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on CAR.

Wednesday, CAR opened at $12.07. In morning trading, the stock hit a high of $12.46 and a low of $11.94. As of 10:55, CAR was trading at $12.18, down $1.10 (-8.3%). The chart for CAR looks bullish.

After the bell, Avis Budget Group (NYSE: CAR) reported quarterly earnings. Several months ago, Avis was part of the Cendant breakup. Cendant, a poorly run conglomerate, held many different companies in a variety of industries with seemingly no synergies whatsoever. Understandably, Wall Street demanded a breakup as the company's components were discounted due to the "conglomerate discount" and operations languished due to a lack of accountability.

Today's earnings report was a perfect example of how companies are able to perform much better if operated independently for a variety of reasons -- most notably increased accountability and better incentive programs. As you can see from the chart on the right, the stock rallied very nicely following it's spin-off but has since sold off.

For the quarter, Avis earned 23 cents per share vs. a loss of 64 cents per share during the same period last year. While the company's performance came in below analyst estimates, it displays the power of the company's cost-cutting initiatives. I think the cost-cutting initiatives, alongside mediocre revenue growth, are going to power the company's earnings higher during the next several years. For example, analysts expect EPS of $1.22 this year and $1.78 next year on just 6% revenue growth.