Select Sector Financial (XLF) May 11/13 call spread trades 10000X. Looks like buyer pays 20 cents, on 5500. XLF up 14 cents to $8.49.

Monsanto (MON) May 95/105 call spread seeing some interest. Investor sells 5500, collects $1.40.

Mosaic (MOS) April 55/60 call spread seeing interest. Player pays 22.5 cents, 3500X.

Acorda Therapeutics (ACOR) options are active. shares are down $4.60 to $20.30 after the company received a refuse to file letter related to its NDA for Fampridine-SR. FDA raised some “format issues” and requested that some data in the application be reformatted, as well as additional supporting information be included. The FDA did not request additional clinical or other studies. In the options market, volume is running 6X the usual. May 22.5 calls are most actives, with 3000 traded and about 61 percent trading bid-side. Implied vols are up to 87 from about 74 yesterday.

Stocks set to rebound from two days of heavy selling. Read More.

Forest Oil (FST) April 15 straddle was active Monday and open interest in both puts and calls increased by more than 1800. Shares fell 8.4 percent to $13.22 and most of the volume was early in the day and in different sizes. For example, top trades of the day: 880 Apr 15 puts for $2.30 and 735 Apr 15 calls for 50 cents, both on the CBOE around 9:50. In the end, it appears a straddle buyer was possibly taking a new position, paying $2.80.

An investor apparently opened a substantial backspread on the iShares Russell 2000 Small Cap Index Fund (IWM) fund Monday, collecting $2.33 for selling 12,500 December 42 puts and buying 25,000 December 30 puts. Open interest data suggest both legs are new positions. The spread was tied to shares at $41.40, delta neutral.

What is a ratio backspread: In a put ratio backspread, the strategist sells puts and buys a greater number of puts at a lower strike (calls is opposite). Typical ratios are 1X2 or 2X3. For example, if I think IBM is going to 130 by yearend, I might sell 2 Jan calls at the 100 strike for $10 and buy 3 calls at the 115 strike for $5. Result is a $5 credit, which I keep if it stays below $100, but will see better profits if stock really rallies.

Fear is back, as GM, financials falter. Read More.

General Motors (GM) lost about 20 cents over the past 15 min., now trading down $1 to $2.62, after WSJ reported that Obama administration is pushing bankruptcy as lead option. Discussing “good” and “bad” companies for GM and Chrysler. Story still developing. GM implied vols up to 266, from about 210 late Friday.

Interdigital (IDCC) is up $4.48 to $26.57 and setting a series of new intraday highs throughout the session. The stock opened up after the company announced that it is expanding its development and licensing biz through investment in cellular and non-cell technologies. It is ceasing the development of its SlimChip product, cutting 100 jobs, and taking a $45 mln charge against Q2 earnings. Cost savings could add 50 cents to EPS in 09 and 70 cents in 2010. IDCC options are seeing brisk trading, with active buying seen in April 25, April 30, and May 30 calls.