In the world of options, it's easy to stick out.

This afternoon's Options Update from Interactive Brokers highlighted a large position traded Friday by an investor in Fannie Mae options.

"Mortgage financier Fannie Mae jumped onto our 'most active by options volume' market scanner after one investor went hog-wild with put options," the note said.

The investor bought 118,000 March $1 put contracts at $0.15 a piece and sold 118,000 January 2012 $1 puts for $0.40 each. The trade brought a net credit of $2.95 million to the investor.

IB has two scenarios for the large trade.

• Open interest of 156,689 puts at the March $1.0 strike indicate the trader could be buying-to-close a previously established 118,000-lot short put position initiated back in September of 2009. If this is the case, the investor is extending the short put position out to the January 2012 contract and expecting the government agency to ultimately survive the next couple of years. In this scenario, the trader keeps the $0.40 in premium on the sale of the fresh batch of put options if Fannies share price rallies above $1.00 by expiration in 2012.
• It is possible that the open interest at the March $1.0 strike is unrelated to todays activity. In this second scenario, the trader is essentially predicting that shares will erode ahead of March expiration. If this is the case the trader sold 118,000 January 2012 $1.0 strike puts for $0.40 apiece in order to take a long 118,000-lot put stance at the March $1.0 strike for which he paid $0.15 each. The net credit received in this scenario amounts to $0.25 per contract and generates additional profits as Fannies shares continue to fall under $1.00.

IB will be watching the open interest at the March $1 level to see if a position is closed, but either way, the trade likely has more than a few Fannie watchers guessing.