Shortly after the close, E-Trade Financial (ETFC: sentiment, chart, options) reported a third-quarter net loss of $50.5 million, or 9 cents per share. On a continuing-operations basis, ETFC's loss arrived at 60 cents per share. Analysts were looking for a loss of 24 cents per share. The company said that it has set aside $518 million in provisions to cover loan losses in the latest quarter, up by $199 million from the previous quarter.

Looking ahead, ETFC said that losses in its home-equity portfolio would expand by 20% for 2008 through 2010. The company said provisions probably peaked in the third quarter, and write-downs will begin to improve in 2009. However, it said it doesn't expect to make a profit in the fourth quarter of 2008.

Heading into the report, options traders were heavily bullish toward the shares. The stock's Schaeffer's put/call open interest ratio (SOIR) of 0.31 indicates that calls more than triple puts among near-term options. Furthermore, this ratio ranks just 4 percentage points shy of an annual low.