The Japanese Yen Spot Price Index (.XDN) is down 1.67 to 107.18 after the US Dollar rallied back above 93 on the Japanese currency. In the options market, XDN volume is at 22 times the average daily levels. March 105 puts are the most actives, with more than 6,000 traded and 71 percent hitting offerside. Existing open interest is only 20 contracts, indicating open buy orders. Similar action is being seen in the US Dollar Settled British Pound (.XDB) Feb 138 puts.

Genentech volume continues strong at 4x adv with a 30,000 contract package trading on the CBOE in which a trader bought 10,000 Feb 90-95 call spreads for $1.20 against a sale of 7500 Feb 65 Puts for 67.5cents and 2500 Feb 70 puts for 1.35. Shares sit near 82.15 and this bullish call spread collar pays off if shares lift through the $95 strike by Feb 20th. Net debit was $356K and the entire trade appears opening.

Chesapeake (CHK, news, chart, volatility) is up 96 cents to $18.23 and 40,000 CHK calls have traded on the day, compared to 14,000 puts. Today’s action comes amid renewed takeover chatter, with Exxon Mobile (XOM) mentioned as a possible suitor (per Briefing). Sentiment is decidedly mixed, however. January 17.5 and 20 calls are most actives. Almost 27,000 contracts (all in fewer than 900 ) but less than half traded ask-side.

Microsoft (MSFT, news, chart, volatility) call options are actively traded. 88,000 traded, compared to 23,000 puts. Jan 24 and April 21 calls are the most actives after a firm bought 4,370 Jan 22.5 calls and 18,646 Jan 24 calls, while selling 12,731 April 21 calls. With shares up 16 cents to $20.49, some of the activity might reflect some bullish trading in Microsoft ahead of an update to financial analysts at a conference later this week. Earnings due out on the 22nd, after the Jan expiration.

State Street (STT, news, chart, volatility) shares are up $1.04 to $42.14, but directional sentiment in the options market seems bearish, amid increasing activity in January and February 40 puts. Recent trades include 2,219 Feb 40 puts at the offer for $4.00 a contract. More than 5,300 has traded. Similar action is being seen in the Jan 40s. No news out today. Earnings due out mid-Jan, perhaps before next week’s expiration.

NVidia (NVDA, news, chart, volatility) calls are actively traded after the Apple Insider reported that a reliable third party claimed that Apple plans to luanch some NVDIA-based iMacs at Macworld. NVDA is up 17 cents to $8.88 and total options volume is running at twice the average daily levels. 21,000 calls have traded, including more than 10,000 Feb 10s.

Updated with Video. The ProShares UltraShort Lehman Bond Fund (TBT), which moves (200%) the inverse the iShares Long Term Bond Fund (TLT), is acively traded. TLT is down after the latest issue of Barron’s ran a cover story about Treasuries, saying “Get Out Now” and that a bubble is ready to pop. TBT is up $1.61 to $40.61 and total options volume is running three times the usual. Jan 41 calls are the most actives, with some short-term players taking positions in anticipation of further losses in Treasuries over the next two weeks.

Looks like an investor is accumulating Cadence Design Systems (CDNS, news, chart, volatility) May 2.5 calls today. 10,000 have traded. The top trade is 6,000 at the offer for $1.60. The rest of the day’s trades been in smaller sizes, mostly at the offer for $1.55. 10,000 have traded in all. Shares are down 2 cents to $3.82. Note: similar activity surfaced about two weeks ago, but it was in the May 5 puts. Open interest in that contract is up from 4,498 on Dec 18 to 16,956.

Agrium (AGU, news, chart, volatility) is up $1.12 to $37.53. Fertilizer stocks are rallying ahead of an earnings report from Mosaic (MOS) due out today after the closing bell. 3,800 AGU Jan 40s have traded, with about 80 percent hitting offerside. Jan and Feb 35 puts are also actively traded. Implied volatility is up to 75, from about 68 late Friday.

Ross Stores (ROST, news, chart, volatility) puts are busy. More than 6,000 traded, compared to 264 calls. Most of the action is due to a three-way spread, where a player bought 2,000 Feb 30 puts, sold 2,000 Feb 27.5 and sold 2,000 Feb 25. They paid 20 cents total and this spread seems to be a new position with a subsantially bearish risk graph.