Netflix (NASDAQ: NFLX - option chain) stock is trading lower today after the company reported some recent insider selling. According to SEC filings, NFLX Director Gregory Strangre sold over 19,000 shares of NFLX on Wednesday for $54.48 per share. He and other insiders have combined to sell more than $2.2M of NFLX stock in the past week, which could be interpreted as a bearish sign for the company. 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 NFLX.

This morning, NFLX opened at $54.96. So far today the stock has hit a high of $55.84 and a low of $54.00. As of 11:50, NFLX is trading at $55.26, down $1.13 (-2.0%). The chart for NFLX looks bullish and S&P does not currently have a STARS rating for NFLX.

The market takes an upward turn, and the insiders head for the exits.

In the wake of the largest stock market rally in 71 years, according to Bloomberg, the sale of insider shares has reached its most aggressive levels in the past two years. Insiders of companies in the S&P 500 were net sellers for 14 weeks in a row. Six people at Amgen (NASDAQ: AMGN), for example, sold $8.2 million in company stock.

McDonald's (NYSE: MCD - option chain) Vice Chairman and CEO James Skinner sold 150,000 shares of the stock on the open market last week. That equates to $8.0M of selling against only a scant $269K of insider buying in the past three months. 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 MCD.

This morning, MCD opened at $54.34. So far today the stock has hit a low of $53.75 and a high of $54.46. As of 11:55, MCD is trading at $54.02, down $0.18 (-0.3%). The chart for MCD looks bullish and S&P gives MCD a positive 4 STARS (out of 5) buy ranking.

UnitedHealth Group (NYSE: UNH - option chain) stock is falling today after Chairman of the Board Richard T. Burke sold 100,000 shares of the stock on the open market last Friday. That equates to $2.9M of selling against no insider buying in the past two months. 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 UNH.

This morning, UNH opened at $27.06. So far today the stock has hit a low of $26.37 and a high of $27.80. As of 11:30, UNH is trading at $26.98, down $0.61 (-2.2%). The chart for UNH looks bullish and S&P gives UNH a positive 4 STARS (out of 5) buy ranking.

Has anybody else out there noticed that Jeff Bezos, CEO of Amazon.com (NASDAQ: AMZN), recently sold $135 million of his stock? Not to worry, these are his regular 10b5 plan sales that are pre-scheduled with the SEC. Just smart diversification I suppose.

Normally, I would think this is not that big a deal since he owns billions of dollars of the stock as the single largest shareholder. If I were him, I would be selling too, in particular because I have felt that AMZN is overpriced for quite a while. (See Serious Money: AAPL, AMZN, GOOG, ISRG -- at what Price?)

The stock jumped early this month when Amazon announced the retirement of debt and a stock buyback plan over the next two years. This was a temporary affect; the stock has been trading in the low $70's recently, give or take a few bucks.

But what strikes me as curious is that this buyback plan is announced while insider selling has rarely been higher! The buyback and Bezos selling inspired me to look at the latest insider trading. When I checked it out I discovered company directors, officers, and "affiliated persons" have all been sellers and only sellers. To be fair some of the sales are listed as 'planned'; however, the plan does not have to be filed very far in advance, so I am not impressed by this.

Best Buy Co. Inc. (NYSE: BBY) stock is falling this morning after one of the company's directors sold 10,000 shares of BBY common stock on Friday under a prearranged trading plan. This news, combined with investors' worries that lower-end shoppers are putting off discretionary purchases to keep covered on everyday staples, is pushing BBY down this morning. 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 BBY.

After hitting a one-year high of $55.59 last December, the stock hit a one-year low of $41.85 in August. As of 11:05, BBY is trading at $50.87, down 86 cents(-1.7%). The chart for BBY looks bullish and steady, while S&P gives the stock a very positive 5 STARS (out of 5) strong buy rating.

For a bearish hedged play on this stock, I would consider a January bear-call credit spread above the $57.50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in 7 weeks as long as BBY is below $57.50 at January expiration. Best Buy would have to rise by more than 12% before we would start to lose money.

BBY hasn't been above $56 at all in the past year and has shown resistance around $52 recently. This trade could be risky if the holiday season turns out to be a big one for electronics and gadgets, but with increasing energy prices and dropping home values, consumers may not have too much discretionary income to spend on holiday presents.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in BBY.

Back in June, the Disciplined Investor was poking fun at the prodigious rate at which Crocs (NASADQ: CROX) insiders were dumping stock as the media hyped the company's prospects. In a satirical letter to the company's shareholders on behalf of the CEO, Andrew Horowitz wrote:

As for me, I still support the stock. I see no reason why it cannot double from here. I am feeling generous and want to give back to those who have helped me....With all of the supporters and bulls looking for shares to go to $150, I want to make sure there are plenty of shares available for those who have not yet been able to capitalize. So selling a large portion of my shares is merely an altruistic move to allow these that do not have shares the ability to now have access at these inflated prices. Why should I be so greedy? Since I have sold about 600,000 shares and now have a smaller position (234,243 shares held directly) I fell much better that I have allowed others to enter the "Crox Club". Now there are 600,000 more shares available for others to buy. I really feel good about this.

Now we're in November. Shares of Crocs have taken a hit, losing nearly half their value since the beginning of the month. And predatory securities lawyers have rushed to the scene, filing class-action lawsuits against the company, filled with vague allegations of securities fraud. Given that nearly every company that has the nerve to report a bad quarter gets sued these days, I'm not inclined to read much into the lawsuits.

Under Armour, Inc. (NYSE: UA) has been falling for the past week after disclosures of insider trading. Chairman and CEO Kevin Plan sold 1.5 million shares last week for almost $90 million. Two of Under Armour's senior vice presidents, Kip Fulks and Scott Plank, also sold 15,000 shares and 850,000 shares respectively last week. Total insider sales over the past month have reached $130.6 M. The insider sell-off causes concern for shareholders despite UA's positive earnings report last month. 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 UA.

After hitting a one-year high of $73.40 in August, the stock has declined over the past three months. This morning, UA opened at $48.20. So far today the stock has hit a low of $45.00 and a high of $48.20. As of 11:15, UA is trading at $46.78, down $1.82 (-3.7%). The chart for UA looks are bearish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bearish hedged play on this stock, I would consider a January bear-call credit spread above the $65 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. This particular trade will make a 4.2% return in less than 3 months as long as UA is below $65 at January expiration. Under Armour would have to rise by more than 49% before we would start to lose money.

UA has never been above $65 for more than a few days at a time and has shown resistance around $60 recently. This trade could be risky if the holiday season turns out to be a big one for retail, but that looks to be an overly optimistic view at this point. Plus, this position could be protected by strong resistance UA has formed around $64, where the stock topped in late October.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in UA.

Ingersoll-Rand Co. Ltd. (NYSE: IR) stock is falling today after economic data was released that showed growth in the service sector is slowing but still positive. On top of that, a quick look at insider trading for IR over the past three months shows that insider selling has picked up over the past few weeks, indicating a bearish attitude from within the company. 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 IR.

After hitting a one-year high of $56.66 in July, the stock has struggled against resistance in the mid-$50's. This morning, IR opened at $54.03. So far today the stock has hit a low of $51.79 and a high of $54.15. As of 11:05, IR is trading at $52.89, down $1.40 (-2.6%). The chart for IR looks neutral but improving, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bearish hedged play on this stock, I would consider a November bear-call credit spread above the $60 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in 7 weeks as long as IR is below $60 at November expiration. Ingersoll-Rand would have to rise by more than 14% before we would start to lose money.

If you're a fan of using insider sentiment to predict the future course of a stock, you may want to stay far away from Papa John's (NASDAQ: PZZA).

A piece in this week's Barron's takes a look at the pattern of insider selling at the company. The long list of form 4's for the company's page in the SEC's Edgar Database tells the story: Shares of Papa John's have been weak performers of late, but that hasn't stopped founder John Schnatter from selling $8.5 million worth of stock on Tuesday and Wednesday of last week alone. Of course, the company explained that the sales were motivated by estate planning and diversification needs, but would he really be dumping if he thought the stock was about to go on a run?

In addition to the sales, Schnatter has also recently reduced his role with the company. He has gone from "executive chairman" to "non-employee founder chairman," and is now receiving stock options in lieu of a cash salary. He will continue to act as a spokesman in the company's ads.

Many restaurant companies have struggled as their entrepreneurial founders reduced their roles and eventually left. Wendy's (NYSE: WEN) is the most high-profile example of this, having struggled mightily since founder Dave Thomas's passing. A video posted on YouTube describes Schnatter's journey from a tiny restaurant to a huge franchise and, while less iconic, it would not be a stretch to suspect a similar fate for Papa John's.

Taken at face value, the insider sales are not a reason to go bearish on Papa John's, but Schnatter's reduced role in the company he founded could be a serious risk factor.

Adobe Systems Inc. (NASDAQ: ADBE) opened at $41.30. So far today the stock has hit a low of $40.10 and a high of $41.46. As of 10:55, ADBE is trading at $40.72, down 0.03 (-0.1%).

Insiders have sold almost $39 million in ADBE shares over the past month, and more than $55 million over the past two months, indicating that people who know think that the stock is not going much higher any time soon. Technical indicators for ADBE are bearish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bearish hedged play on this stock, I would consider an September bear-call credit spread above the $45 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk and leverage returns. For this particular trade, we will make an 11.1% return in just 6 weeks as long as ADBE is below $45 at September expiration. ADBE would have to rise by 10% before we would start to lose money. Learn more about trades like this one here.

ADBE has never been above $45 and has shown some resistance around $42 recently. This trade could be risky if Adobe stabilizes and starts to move higher, but even if that happens, it could be tough for the stock to get back over the $45 level where it topped out in June.

Brent Archer is an options analyst and writer at Investors Observer.

Merrill Lynch and Company Inc's (NYSE: MER) top executives have been selling a lot of stock, according to Barron's Online's "Inside Scoop" column (subscription required). So far this month, the top three execs have grossed $29.7 million. Supposedly, this is the highest level of monthly selling since January 2001.

Yesterday, HSBC Holdings plc (NYSE: HBC) increased its reserves for the blow-up of its mortgage portfolio. New Century Financial also reported blow-up results. Both of these companies are in the higher risk part of the mortgage market, but that is where the trouble always starts.

Brokerage firm results have been utterly spectacular for the past five years. A lot of that success can be attributed to the fixed-income business. However, the flat yield curve is most likely going to start impacting results as steep-yield curve trades begin to expire and cannot be replaced in this flat-yield curve environment.

The old-line brokerage firms are too big to report the results they have been reporting for so long. The law of large numbers has to apply at some point. The insider selling is pointing to a tough time ahead for fixed income traders and the brokerage stocks.