Wyeth (WYE, news, chart, volatility) options traded twice their normal volume today, with shares losing 10% and trading near 32.30 with 2 minutes left to go. Nearly 10,000 calls have traded in WYE, against 964 puts, and flow indicates a bullish view that shares may recover over the near term. Nearly 3000 Jan 37.5 calls have traded, with majority of the flow on the offer and implied vol lifting 7% at the strike. Jan 40-50 call spread traded earlier in the day 1850x for 82.5cents, possibly closing some of the open interest at the strikes.

Prudential (PRU, news, chart, volatility) is seeing action late Monday. Recent trades include 3,500 PRU January 15 puts traded offerside for $3.33 per contract and 3,500 PRU January 30 calls traded bidside for $1.10. Both traded at 15:48 ET on the ISE. With Prudential down $3.83 to $17.87, the activity looks like part of a collar as a block of 186K shares traded for $18.30 a minute later. If so, the strategist is possibly looking for a hedged way to play the stock for a move higher and paid $20.53, with downside limited by the put (26.9 percent) and the upside capped by the call (46.1 percent).

The CBOE Volatility Index (.VIX) is up 9.16 to 64.44 and has retraced about 38 percent of the losses sustained from November 20 to November 26. Risk perceptions are higher as market breadth turned negative once again and only 6 components of the S&P 500 find themselves above water late Monday. The S&P 500 Index has given up about 38 percent of its gains seen from November 20 to November 28 and is sitting near support at 840. Not much hedging activity is being seen, however. 204,000 SPX puts and 161,000 calls have traded so far today. Another 21,000 puts and 25,000 calls have traded on the VIX itself.

Puts on Dow Chemical (DOW, news, chart, volatility) are active. The January 12.5s are the most actives, with opening trades being seen and 99 percent trading offerside. December 15 and January 10 puts are also being bought. Shares are down 14 cents to $18.41 and it the activity in the deep out-of-the-money puts seems to reflect bearish bets, maybe disaster insurance or speculators looking for a very cheap way to play shares for a move lower.

Action in Yamana Gold (AUY, news, chart, volatility) continues. The stock saw heavy call buying on more than one occasion last week. Today, shares are down 67 cents to $5.14 after glod fell $44 to $775 an ounce. Sentiment in AUY options remains bullish despite the pullback. 31,000 AUY calls have traded, compared to 2,200 puts. The January 5 calls are the most actives, with 14,600 traded and 88 percent of today’s trading hitting askside. Another 6,130 December 5 calls traded, with 84 percent trading offerside.

Options activity in the iShares Longer-Term Bond Fund (TLT) is running at two times the average daily levels. Bonds continue to rip higher without much thought to future supply issues. Skittish and yield hungry investors are snapping up the ten-year Treasury even as its yield falls to just 2.83 percent. The action in TLT options hints at some capitulation by bond bears, as the fund rallies $2.22 to $107.82 and the December 100 puts lead the day’s order flow. 15,069 have traded with only 2 percent trading offerside (33 percent on the bid and 66 percent mid-market). With existing open interest of 16,263 contracts, today’s volume appears to be closing out of put positions as the TLT climbs to new highs.

CH Robinson Worldwide (CHRW, news, chart, volatility) is seeing unusual action. Volume is running at 27 times the average daily, with most of the trading focused on the May contracts. The overall positioning seems bullish, as it looks like a ratio spread, where a strategist bought the 12,000 May 50 calls and sold 20,000 May 60 calls. They also sold 20,000 May 35 puts and bought 5,600 May 45 and bought 3,000 May 40 puts. They sold 250,000 shares short. Overall, the risk profile seems bullish, with the best gains at 60 where the short calls expire worthless.

Shanda Interactive Entertainment (SNDA, news, chart, volatility) options are actively traded as the stock falls along with Sina.com (discussed earlier) and other Chinese Internet/Portal companies. A subscriber notes that the group is under pressure following a Financial Times report (Baidu faces wave of legal challenges) that sent shares of Baidu, China’s largest internet search engine, skidding for a 15 percent loss Monday. In addition, SNDA reports earnings after the close today. Trading is cautious ahead of the news. Volume in the options market is running four times the usual, with 4,300 SNDA puts and 2,300 calls traded. Implied volatility is up to 93, from about 80 late Friday.

To Miss Scheduled Interest Payment

Thor Industries (THO) halted. News pending. Note: the company is due to report earnings this week.