*Overall options action reflects cautious sentiment
*Traders roll bullish/bearish stock positions into Sept
*Action seen in Lennar, Best Buy and Saks
CHICAGO, Aug 20 (Reuters) - Traders have been busy rolling their bullish or bearish positions in stocks during Friday's monthly expiration of August options.
Many investors are rolling positions forward to September expiration, when there is the quarterly expiration of equity futures and options.
"With today being August options expiration, option traders are busy rolling positions out to the next month, September, either to extend a profitable position, or extend a losing position in hopes of turning the trade into a winner," said Joe Kunkle, a founder of analytics firm OptionsHawk.com in Boston.
August options on individual stocks go off the board on Friday after the close and settle on Saturday.
"During September expiration, investors typically reassess their positions at the end of the third quarter and then make their plans for the year-end and beyond," said TD Ameritrade chief derivatives strategist Joe Kinahan.
Overall options action seems to reflect cautious investor sentiment after two weeks of losses for the stock market, said WhatsTrading.com options strategist Frederic Ruffy.
By 3:20 p.m. EDT, 6.74 million puts and 6.30 million calls crossed the tape in the U.S. options market, according to options analytics firm Trade Alert.
"The fact that the puts are outnumbering calls indicates that investors have been stepping up their portfolio protection and are concerned about the risk of additional losses in the weeks ahead," Ruffy said.
Kunkle noted some of Friday's larger positions rolled:
*Flamel Technologies SA (FLML.O) where a monthly call option roll of 8,713 August $5 calls to September $5 calls resulted in 20 times the average daily call volume.
*Retailer Saks Inc's SKS.N roll of 10,000 August $7.50 calls to November $7.50 calls, which extended a bullish bet in the retailer.
*Starwood Hotels & Resorts Worldwide Inc's (HOT.N) roll of 3,500 August $46 calls to September $47 calls with an investor paying an additional $1.27 per contract to stay bullish.
*Cruise operator Royal Caribbean Cruises LTD's (RCL.N) (RCL.OL) roll of 3,100 August $26 puts to 6,300 September $25 short puts, indicating limited downside.
*Natural gas provider Clean Energy Fuels Corp's (CLNE.O) roll of 3,000 August $16 short puts to 3,000 September $15 short puts, which resulted in 12 times the daily average put volume, suggesting limited downside in the shares.
*Comerica Inc's (CMA.N) roll of 3,000 August $35 puts to September $35 puts, which is an extension of a bearish bet in the U.S. regional bank
*Lennar Corp's (LEN.N) roll of 10,000 August $13 puts to 10,000 September $12 short puts, indicating limited downside in the homebuilder ahead of key housing data next week.
*Semiconductor maker International Rectifier Corp's IRF.N roll of 2,500 August $20 puts to September $20 puts, which was 25 times the daily put volume. This suggests a position that maintains a bearish view ahead of its quarterly results due next week.
*Electrical retailer Best Buy (BBY.N) has seen 10,000 August $31 puts rolled to 5,000 September $25 puts as shares continue lower and more than 30,000 puts traded earlier in the session, or five times the average daily volume.
*Mednax Inc (MD.N) traded 25 times the average put volume as 1,165 August 50 puts are rolled to September 50 puts, a position that maintains a bearish view on the medical services firm.
An equity call conveys the right to purchase shares at a fixed price up to a certain date while a put option grants the right to sell shares at a fixed price any time until expiration.
(Reporting by Doris Frankel, Editing by Chizu Nomiyama)