SunTrust (STI, news, chart) is seeing double its normal trading volume on renewed spread trading. A total of 37,000 STI puts and 4,000 calls ahve traded. The stock is down 57 cents to $44.73 and one player seems to be positioning for a further decline in shares of the regional bank. Shortly after 11:00 Eastern time, an order for 10,000 of the STI January 40 puts traded for $5.00 and the same number of January 25 puts traded for $1.25. Although these trades hit bidside, sources on the AMEX tell us the trade was a customer order to buy 10,000 January 40/25 spreads for $3.75. If so, the strategist is possibly looking for STI to make a move below $36.25 by January options expiration and stands to make $11.25 if it settles for $25.00 a share or less. In addition, total volume in those two contracts now exceeds 15,000, suggesting the spread might have been initiated more than once. Open interest in the 40s is 4,540 contracts and 9,524 in the 25s.

Yahoo (YHOO, news, chart) is seeing double normal trading volume. The stock is down 67 cents to $18.09 and touching a new 52-week low Thursday after JP Morgan analysts cut their forecasts for online advertising due to macroeconomic weakness. Biggest weakness is expected in the display advertising. In the options market, sentiment is leaning on the bullish side with 94,000 YHOO calls traded, and 7,000 puts. The day’s top trade includes a block of 50,000 YHOO October 30 calls traded offerside for 4 cents a contract.

UST Inc. (UST, news, chart) is seeing 30 times normal options trading volume on news the company has pulled out of a Lehman Brothers Conference this afternoon. The announcement seems to have some traders thinking good news is pending, as the stock is up $2.28 to $56.32 and trading is very active in the September and October 60 call options.

Nuance (NUAN, news, chart) is seeing bullish order flow despite weakness in the share price. Shares of the Burlington, MA based application software developer are down 43 cents to $14.98 and 9,565 NUAN calls have traded, compared to just 215 puts. The October 17.5 calls are the most actives, with nealry 6,000 traded and 98 percent hitting offerside. The action hints at speculative call buying in anticipation of short-term strength in Nuance shares. Still checking for news.

Clean Energy Fuels (CLNE, news, chart) is among the most active small cap names Thursday. Shares rose $1.52 to $19.40 after the city of Los Angeles Sanitation Bureau awarded CLNE with a contract to supply fuel for a municipal fleet (340) of Liquefied Nautral Gas powered refuse trucks. The contract to last up to 10 years. In the options market, volume is running double the usual, with 3,800 CLNE calls and 770 puts trading during the 50 minutes of Thursdays trading session. Sentiment is mixed, as some of today’s call volume appears to be closing out of bullish trade after a jump in CLNE call activity in recent days.

The US Oil Fund (USO) has given back early gains and is trading lower ahead of weekly inventory data due out at 10:30 (ish) Eastern time. Analysts expect the report to show crude oil stockpiles with a build of 450,000 in the week ended August 29. Distillates expected to show a build of 1000K and gasoline a draw of 1300K. Crude oil is down 16 cents to $109.19 ahead of the news. USO hit a morning high of $88.58 early, but is off 16 cents to $88.28 a share. Trading in the options market lacks conviction as well, with none of today’s trades in the oil fund consisting of orders greater than 213 contracts.

Tesoro (TSO, news, chart) September 20 and 22.5 calls are actives, as speculators react to takevoer chatter. Sunoco (SUN) mentioned as a possible suitor. A total of 11,000 TSO calls have traded, with active buying in the front month. Shares up 33 cents to $19.01.

Clorox (CLX, news, chart) is already seeing five times normal trading volume. With shares up 74 cents to $61.74, playeres a buying the September 65 and October 65 calls. Looks like speculative call buying in anticipation of short term strength in Clorox. Takeover chatter cited as the reason for the uptick in volume. Procter & Gamble (PG) being mentioned.

Morgan Stanley (MS, news, chart) is seeing bearish order flow early. The day’s top two trades include an order for 10,000 of the January 43 puts for $5.70 a contact and 10,000 of the January 25 puts for 80 cents. Open interest in the 43s is 583 contracts and in the 25 puts, 29,670. Shares are down 32 cents to $41.85 and the action appears to be the opening of a bearish spread, which was initiated for $4.90 on the PHLX shortly after the opening bell.

VMWare (VMW, news, chart) saw a bump in call volume late Wednesday. The stock saw a late day spike and finished the day up 41 cents to $38.93. Briefing.com attributed the move to talk on a virtualization blog about last week’s takeover chatter, which mentioned Cisco (CSCO) as a possible suitor. VMW was also presenting at a conference Wednesday. For whatever reason, call volume spiked late in the day, with 15,100 of the VMW September 45 calls trading on the session and open interest increasing by 6,800. Open interest in those calls, which have a little more than two weeks of life remaining, now stands at 21,698.