Sovereign Bancorp (SOV, news, chart, volatility) options are trading actively this morning, with the stock off nearly 1/3 to $5.71 as the crisis in financials plays out. Focus is on the October 5 Puts, where buyers accumlated nearly 3000 contracts from 50cents to 1.15 in 30mins as the stock cratered. SOV stock held steady near $8 last week as the market waited for Washington, but current action suggests some panic downside buyers willing to pay very high premium levels for protection in case of a downside event.