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November 20 calls on the Market Vectors Coal Fund (KOL) are being bought, even as these contracts move deep out of the money two weeks prior to options expiration. The group is under pressure today after steel companies announced production cuts of up to 20 percent, which is likely to reduce demand for coal. KOL, which is an exchange-traded fund holding 41 companies from the industry, is down $2.17 to $15.23 and not far from session lows (15.16). The fund is down 21.4 percent from its Tuesday close of $19.38 per share. Some players seem to be looking for a cheap way to play a rebound, however. 1,400 KOL November 20 calls have traded, with 92 percent of the day’s volume trading offerside. Open interest is 989 and therefore the action looks opening.

Options on clothing maker Bebe Stores (BEBE, news, chart, volatility) are seeing a spike in call volume ahead of earnings, due out after the close today. Stock is relatively flat today, near 7.50, and 1250 of the Jan-09 10 calls were bought for 30cents just before 1pm. In addition, Dec 10 calls were bought to open last week for 20cents, suggesting possible positioning to profit from an upside move. 52w low for shares was set last week at 6.13, and current share level is about half the year-ago price.

Tim Hortons (THI, news, chart, volatility) is seeing 42 times average daily options volume, with 6,200 puts and 150 calls trading on the day. Shares of the company, which is engaged in the development and frachising of quick service restaurants, are down 39 cents to $24.84. The November 25 and 22.5 puts are the most actives after 3,000 of the 25s traded on the offer for $1.40 and 3,000 of the 22.5s on the bid for 35 cents. The activity looks like bearish spread trading, where the strategist paid $1.05 for a potential $1.45 payoff if THI falls to $22.5 or less over the next two weeks. The company is due to report earnings tomorrow morning before the market.

Public Storage (PSA, news, chart, volatility) puts are trading actively ahead of this afternoon’s earnings release. Shares are currently off 6.8%, near $71.00, and one customer expressed a bearish view by paying $3.15 for 3000 Nov 60-70 put spreads when shares were near $72.59. This trade will create new open interest and suggests concern that shares may retest the recent 52-week low of $65.65.

Autonation (AN, news, chart, volatility) earnings were light this morning and shares are currently down nearly 8% to $5.55 but well above the 52w low of $3.97 hit 10/24. Option volume today is 5x recent average levels and dominated by a large vertical call spread crossed on by PHLX floor broker DND Securities just before noon. In this trade the seller collected 1.45 for 10,000 Dec 5-10 call spreads that will create new open interest and perform best if AN shares do not see much upside over the remainder of the year.

MBIA (MBI, news, chart, volatility) short-term out of the money puts are active. Shares are down 50 cents to $7.66 after Friedman Billings cut the price target on the stock to $9 a share after the company reported an operating loss of $2.22 a share yesterday. The firm remains cautious because of the tight credit and liquidity conditions. However, the firm says the company has so far managed the problems better than other bond insurers and it might also benefit from government’s TARP program. Players in the options market seem a bit more concerned, with 18,000 puts and active buying in the November puts with the 4 and 5 strike prices.

Gold Fields (GFI, news, chart, volatility) calls are active Thursday. Shares of the gold miner are down 51 cents to $6.34 and 13,300 December 7.5 calls traded. 89 percent traded on the offer and open interest is only 858 contracts. Looks like opening call buying on hopes for a rebound in GFI. Shares of the South African gold mining company have been falling along with the yellow metal, down 30.1 percent in October and now seeing another month-to-date loss in early-November. Gold has given back early gains and is down $8.60 to $733.80 an ounce today, down almost 20 percent since the end of September.

A large butterfly traded in options on H&R Block (HRB, news, chart, volatility) today, as shares outperform today’s market by lifting 10cents to $18.48. In this bullish a trader sold the January 10-15-20 put fly 5100x for a net credit of $1.15 on the PHLX. If opening, the profile of the fly is relatively straightforward, with a profit of $1.15 ($586k) if shares finish above $20 Jan 16th and a potential max loss of about 3x that amount with shares at or below $10.

Las Vegas Sands (LVS, news, chart, volatility) implied volatility has spiked higher as the stock sinks on concerns about its financial situation. Shares are down $4.49 to $7.17 and hit session lows of $6.52. CNBC’s David Faber made comments about the stock weakness, saying that it all comes down to whether or not the company can raise capital. The stock is getting whacked on fears that it can’t and volume in the options market is running four times the usual. 55,000 puts and 29,000 calls have traded. Implied volatility is up to 286, up from just under 200 the day before.