burst of Sep 20 put buying early on- sweeps paying 1.80 and 1.85, IV near 55% but IVs have come in from higher levels earlier this month

options very active with the stock down 15% on deal concern. Interesting to note that yesterday we saw the options trade double normal volume, led by activity in April Puts and IV at the Apr 32.5 strike lifting from the 130% to 140% range. Today’s activity is triple normal levels and dominated by April OTM call trading. Notably the upside implied volatility is higher than downside in april options, suggesting that traders do not share the view that the deal is at risk.

busy at twice it’s typical pace of option trading with 33,000 contracts traded by midday. Most active single option in pharma today is Pfizer Sep 25calls. 11,000 traded on the day, 98% of the activity taking place on the offer including a multi-market sweep buyer of 10K for 25c just after 10am. IV for the contract is stable at 25.3% and ISE sentiment data confirms opening cust buyer. Earnings april 17th but this looks like a longer term upside play.

The Select Sector Financials (XLF) are showing relative weakness this morning and sentiment is bearish ahead of housing data due out in five min. Economists expect another poor showing, with new home sales falling to an annual rate of 580,000 units in Feb., down from 588,000 the month before. XLF is down 61 cents to $25.97 ahead of the news and sentiment is 88 percent bearish.

Shares lifting off recent lows near $1.60, with earnings expected after the close tomorrow and options trading at more than four times the normally quiet 860 contracts daily. Stock dropped more than 50% from the $13 range in January on a surprising portfolio revaluation and shortage of capital, but recent option flow suggests some traders looking for a bounce, with sellers closing their long position in 2.5 strike Puts last week at IV levels above 100% and opening buyers of April 2.5 calls today for prices from 15cents to 30cents as the stock lifted.

Can?t Get Off the Pot. After a dip early, the S&P 500 (.SPX) spent the morning grinding higher, but got stuck in a very narrow three-point range during the second half of trade. Given the big downside miss in the consumer confidence report, the day found no new catalysts to motivate another round of buying after two days of big gains. The net result was relatively low volatility and choppy market action, which left the VIX little changed as well. It rallied up to 26.42 early, before edging down to new found support near 25.2. With 15 min. to trade, VIX is down .21 points to 25.52. On the day, 61,000 VIX calls traded, compared to 22,000 puts.

Call options are active in Origin Agritech (SEED) ahead of an earnings report due out after the closing bell. The stock is seeing unusual action as well, up $2.13 to $6.85 a share. Meanwhile, volume in the options market is running three times its usual, with 3,639 calls and 913 puts trading on the day. Sentiment is 55 percent bullish. In October 2007, the stock, which is down 62.7 percent from its early-2007 highs, was voted Asia’s 200 “Best Under a Billion” by Forbes Asia Magazine.

apr 37.5c mer sld 8500 @ 1.25 , x=7000

Put options on EMC (EMC) have been active throughout the trading session. Volume is running three times normal, with 65,000 puts trading, compared to 31,000 call options. No obvious news to explain the action, but a lot of the interest represents buying of April and May 15 puts. Stock is up 14 cents to $15.05.

The CBOE Volatility Index (.VIX) is falling to its lows of the day, as the major averages find some late day strength and shares of Merrill Lynch (MER), which weighed on the financial sector following a JPM earnings revision this morning, briefly poke into positive territory. The AMEX Broker/Dealer Index (.XBD) is now up 2.50 points to 169.63 and the VIX is down .49 to 25.24. Signs of cautious trading remain, however, with 84,000 MER puts trading on the day, compared to 46,000 call options. Today?s top trades also included a large purchase (12,390) of VIX June 32.5 calls.