Bullish trading surfaced in Range Resources (RRC, news, chart) Thursday. The stock hasn’t been doing well. RRC is down from a high of $76.81 in mid-May to $42.34 at the closing bell Thursday: a 44.9 percent swoon. The latest decline comes despite positive commentary from the brokerage community lately. On July 18, for example, Stifel upgraded RRC to Buy and set an $84 per share price target. On July 25, RBC raised the stock to Outperform. Suntrust upgraded RRC to Buy with a $70 price target on July 28 based on valuation and improving Marcellus shale economics.

Now, at least one strategist in the options market seems to share a bullish view on Range Resources. At 14:30 Eastern time, an order of 5,000 December 50 calls traded offerside for $4.10 a contract on the PHLX. At the same time, 5,000 of the December 65s traded bidside for $1.30 a contract. With open interest of less than 500 contracts combined, the action has all of the signs of the opening of a substantial bull call spread. If so, the strategist is paying a net debit of $2.80 (per spread) and has the potential of making of $12.20 should RRC rally to $65 a share or beyond by December options expiration.

Update. We highlighted increasing call buying in Sprint Nextel (S, news, chart) at 15:00 Eastern time with the stock trading at $7.05 a share. Shares have since rallied on news the company has canceled an offering of $3 billion in convertible stock. S hit a high of $8.55 on the news, 22.1 percent off session lows, and are now trading for $7.79 a share.

Red Hat (RHT, news, chart) is seeing 13 times its normal trading volume, with 18,000 calls and 2,200 puts trading on the day. Most of the action is in the January 22.5 and 25 calls, and seems to be mostly closing call selling into today’s move higher in RHT. The stock is up 60 cents to $22.60 and the Jan. 22.5s are the most actives, with 10,800 contracts traded and only 38 percent of that volume trading offerside. Open interest is 74,477. Meanwhile, 5,730 of the 25s have traded, with only 31 percent trading offerside. Open interest in that contract is 26,594.

The CBOE Volatility Index (.VIX) moved higher after another round of dismal news from the financial industry, disappointing same store sales from Wal Mart (WMT), and a rebound in crude oil conspired to send the major averages sharply lower Thursday. The S&P 500 (.SPX) has given back 24 of its 40-point rally from the two days before. Stocks opened broadly lower after AIG (AIG) reported a hefty loss for the most recent quarter and Wal Mart said July sales rose less than analysts expected. With 20 min. left to trade, AIG and WMT are still the Dow’s biggest losers, down 18.5 percent and 6.2 percent, respectively. Meanwhile, crude oil edged higher and recently traded up $1.40 to $120 a barrel. The spike in crude oil and disappointing stock news seemed enough to quash some of the overzealousness seen in the market during the past two days. In fact, although gold traded down $3.00 to $880.00 an ounce, the flight to safety trade was back in other places. The benchmark ten-year Treasury bond surged more than 1 point, pushing its yield down 113 basis points to 3.95 percent on the day. Meanwhile, VIX is up 1.16 to 21.39 and not far from session highs (21.46) heading into the close. Earnings from Fannie Mae and data on productivity and wholesale inventories due out Friday morning.

Sina (SINA, news, chart) shares are down $3.76 to $40.18, but implied volatility in the options is easing following the company’s earnings release. Shares of the Chinese Internet portal fell after the company beat earnings estimates for the most recent quarter, but results showed an unexpected jump in sales and marketing costs. Players in the options market are leaning on the bullish side despite the stock’s slide. 7,100 SINA calls have traded, compared to 3,100 put options. While some of the volume reflects some post-earnings premium selling, the August 40 calls are among the most actives, with 1,200 contracts traded and 82 percent trading offerside. Implied volatility is falling back below 50 percent, down 25 percent on the day.

Sprint Nextel (S, news, chart) is seeing some bullish trading Thursday. The stock is trading down 28 cents to $7.07 and is down 17.3 percent since reporting disappointing earnings on Tuesday. However, some players now seem to be taking a bullish view on Sprint. 25,000 calls have traded on the day, compared to 8,300 puts. The November and September 8 calls are the most actives, with almost 15,000 contracts traded and 93 percent of that volume trading offerside. The stock was upgraded to Buy today at Pali Research with a $10 price target based on valuation. Firm says, among other things, investors should take advantage of weakness today related to positioning ahead of the expected close of convertible stock sale.

Open Text (OTEX, news, chart) is seeing three times normal trading volume on active buying of the September 35/30 strangle. More than 1,200 (2,500 total) have traded. The action is happening as a number of orders of 150 contracts or less hit offerside. The increasing buying interest seems to be driving up implied volatility in those contracts (+10.5 percent to 78.4 percent) ahead of an earnings report expected on August 19. No other news on OTEX today.

Sandisk (SNDK, news, chart) is seeing unusual action. The stock is up $1.09 to $16.33 and leading the chip sector higher. While the Dow Jones Industrials are down 123 points and the NASDAQ is off 5 in afternoon trading, the Semiconductor HOLDRS (SMH) is up 77 cents to $29.57. There is no news to explain the relative strength in SNDK, but the options activity is noteworthy as well. Volume is running double the usual, with 39,000 SNDK calls and 21,000 puts trading so far today.

The top four trades in the US equity market so far today involve blocks of puts on American Capital (ACAS, news, chart). Two blocks (19,750 and 18,668 contracts) of August 25s traded bidside or $3.55 a contract (average) and two blocks (19,750 and 18,668 contracts) of November 30s traded offerside for $11.35 (average). This was repeated several times and volume in the Novembers is 74,700 and 64,900 in the August. With open interest of 72,301 contracts in the August and 3,496 in the Novembers, the volume seems to be rolling of a substantial position in long puts ahead of next week’s options expiration.

The ISE Euro Index (.EUI) is seeing bullish order flow. The EUI is a cash index that tracks the performance of the euro against the dollar. Like other ISE currency indices, it is dollar-based and therefore will move higher with the dollar. Today, for example, the EUI was able to shake off early weakness and trade up 33 cents to 65.23 after the euro fell to 1.533 against the buck (1/1.533 = .6523). The euro is seeing some volatility Thursday after the European Central Bank [ECB] voted to leave interest rates unchanged and ECB Prez Trichet noted downside risks to growth.

That, in turn, seems to be viewed as a bullish development for the dollar in the eyes of some traders. Volume in the EUI is running 40 times the usual, with more 5,000 calls and 720 puts traded on the session. 3,000 of the December 66s and 2,000 of the March 66.5 calls traded offerside.

Meanwhile, some players bought opened bear put spreads on the Currency Shares Euro trust (FXE), which is an exchange traded fund [ETF] that tracks the euro (moves inversely to the dollar). For example, at 10:45 Eastern time, an order of 1000 FXE September 152 puts traded offerside for $1.30 a contract on the PHLX. At the same time, 1,000 of the September 149s traded bidside for 40 cents a contract. The trade was repeated several times and the volume in those two contracts is more than 4,000 contracts (2,000 each), and well above exsiting open interest. Therefore, in this case, traders seem to be opening bearish spreads on the FXE, which would also represent bullish bets on the buck.