Take Two Interactive (TTWO, news, chart) is seeing double its normal trading volume, with 11,000 calls and 160 puts trading on the day. Shares are up 69 cents to $25.15 after Electronic Arts (ERTS) and Take Two announced the two companies have entered into a confidentiality agreement. Among other things, the two are prohibited from disclosing the status or terms of any discussions or negotiations regarding a possible merger. No further announcements will be made until either 1) discussions have been terminated or 2) the companies have entered into a transaction. While shares rose on optimism for a deal, reaction in the options market is mixed. The September 25 calls are the most actives. 5,000 contracts have traded. With open interest of 19,759, today’s volume seems to be a mix of buying and selling, perhaps some opening some closing. Meanwhile, the October 27.5s and 30s are seeing some selling, possibly on the view that, regardless of the outcome, a significant move in TTWO above $27.50 or $30.00 a share is becoming less likely.