Citigroup (C) is seeing an increase in call buying. Recent trades include 1,000 January 20 calls traded offerside for 40 cents a contract and 1,049 January 22.5 calls traded on the offer for 21 cents. More than 14,500 of these two contracts have now traded, with almost two thirds traded on the ask side of the bid-ask spread. C is up 25 cents to $13.36.

Options volume in the PowerSahres DB US Dollar Index Fund (UUP) is seeing three times normal trading volume, on active selling in November 26 puts. The fund, which is designed to track being long the dollar against the yen, the euro, the pound, the Canadian dollar, the Swedish Krona, and the Swiss Franc, is up 42 cents to $26.53. More than 5,000 of the November 26 puts have traded. The top trade is a block of 4,339 contracts traded bidside for 60 cents. With open interest of only 79 contracts, the action is perhaps an opening put write and, if so, a bet that the US dollar will hold higher against other major currencies between now and November options expiration (21 days).

Pacific Gas and Electric (PCG) March 45 calls saw an increase in open interest of 5,000 contracts. Yesterday, with shares near $36.90, a total of 5,000 March 45s traded for $1.41. The calls were tied to stock and sold in two tranches. It appears to be buy writes and a bet that the stock, which is up more than $10 from 52-week lows seen on October 10, will continue to move higher from here.

Implied volatility is higher in Prudential (PRU) and a number of other insurance and HMO stocks Friday. In PRU, implied volatility is moving above 200, up from roughly 190 the day before. IVs are also heightened in Cigna (CI), Humana (HUM), and Alliance (AIZ).

Bearish trading continues in Wells Fargo (WFC). Recent trades include 3,000 December 30 puts traded for $2.60 and 6,000 December 20 puts traded bidside for 60 cents. Exchange floor contacts tell us the action is part of 1×2 ratio spreads. If so, it appears the strategist sold two 20s for very 1 of the 30s for a net debit of $1.40. The potential payoff is $8.60 if WFC closes at $20 a share at December options expiration. The range of profitability is between $11.40 and $28.60, with losses beyond the debit if WFC makes a move below the downside breakeven.

Open interest in Radioshack (RSH) November 12.5 puts saw an increase in open interest. Shares closed up 9 cent to $12.13 and total volume was four times the usual, with 12,000 puts and 377 calls traded. Open interest in the November 12.5s rose by more than 5,000, and seems to reflect some bearish trading in Radioshack, with buyers paying $1.10 to $1.45 and implied vols moving up to 90, from about 85 the day before.

continued) Today’s option flow suggests positioning for the original $70 cash deal to close by year end as originally indicated. Dec 65 calls are active, with buyers leading the flow and paying $3 for more than 10,000. The $68 breakeven on these calls suggest little room for repricing.

Budweiser shares are up 1.3%, near 62.80, and merger-arb traders continue to position around the pending $70 cash deal from InBev. Speculation that the deal price may be adjusted has kept BUD shares hovering near $60 but today

Wells Fargo shares started the day slightly lower, near 31.70, and initial option flow has been dominated by put buyers, lifting nearly 2000 Nov 25Puts for 80cents, followed by more than 2000 Dec 30 puts for $2.80 and suggesting concern that shares may heading lower. Following initial weakness shares have rebouned, currently up 1.5% and call buyers have emerged as well, lifting Nov 31 calls and upside Dec 37s.

UAL Corp. (UAUA) and Delta (DAL) are seeing bullish trading early. Shares of UAL are up $1.29 to $14.47 and the November 20 calls are the most actives, with 2,730 traded offeride. Delta (DAL) rose 13 cents to $9.68 and buying is picking up in the January 10, November 10, and November 7.5 calls. (Note: some of the heavy volume seen in the January 10s yesterday and today might also be part of a strategy that involves the December 125/100 options, which have also seen active trading over the past two days).