Stocks slide on revised economic outlook. VIX spikes. Read More.

The Proshares Ultra Short Dow Fund (DXD) is developing some bullish momentum. DXD is designed to to move twice (200 percent) the inverse to the Dow Jones Industrial Average (specs.) The Dow sank 200 points Monday and some traders flocked to DXD calls as the exchange-traded fund rallied $2.41 to $49.63 (chart). Total options volume jumped to 2X the usual, with 4,750 DXD calls and 1,820 puts traded. July calls at the $46 strike were the day’s most actives.

Trading activity picked up in online options broker OptionXpress (OXPS) Monday. Shares are off 55 cents, or 3.5%, to $15.15 and option volume is 4X daily average. Puts are outpacing calls by a margin of 3:1. The feature trade is the purchase of the September 15 – 17.5 put spread 250X. Open interest in the 17.5s is sufficient to cover and this might be a defensive rolling down of short put (bullish position) that was established on June 10 when shares were trading $17.20 and the same 17.5 puts were trading $2.55 a contract. Other online brokers such as Ameritrade (AMTD) have also lost over 15% in past two weeks as trading volume has dried up.

Human Genome Sciences (HGSI) is down a dime to $2.61 and 8,650 calls traded, or 10X the number of put options. Trading is busy in July, August and October calls at the $5 strike, with buyers apparently driving most of the volume (about 85 percent hitting ask-side). Meanwhile, implied volatility remains elevated, but is easing a bit, down to 244 from 253 late Friday. The company’s senior management is expected to present a corporate overview at a Piper Jaffrey conference tomorrow.

Players in the options market are bracing for some potential volatility in Chico’s FAS (CHS) ahead of a June 26 meeting with analysts. Shares of the Fort Myers, FL apparel retailer are down 53 cents to $9.63 and options volume is running twice the usual, with active trading seen in July 10 puts. 5,000 traded and ISEE sentiment data indicate that about half of today’s trades on ISE (2,400 contracts) are opening customer buys. Meanwhile, the increasing demand for premium is sending implied volatility to 71, up from about 64.5 late Friday.

Akamai Technologies (AKAM) shares have fallen in a slump, but today’s decline seems to have motivated some bullish trading in the Internet company. AKAM is down $1.43 to $19.10 today and 16.6 percent since June 11.

In the options market, 17,000 calls had changed hand midday, which is about 9X the expected. The top trades appear to be part of a three-legged trade after a strategist bought 2000 July 21 calls, sold 4000 July 22 calls and sold 2000 July 24 calls. The action is possibly a position adjustment, as significant open interest exists in all three contracts. Meanwhile, August 20 and 21 calls are also busy, with a combined 4,850 traded and about 75 percent of the volume hitting ask-side of the bid-ask spread. Looks like opening buyers are driving the flow and the activity seems to reflect a bullish view on the Cambridge, MA internet company. Implied volatility is moving: up to 55, from about 49 late Friday.

Buyers are nibbling at Best Buy (BBY) calls Monday morning. Options volume is running about twice the expected for the first 90 minutes of trading. The top two trades of the day: 1,750 and 1,525 July 40 calls for 15 cents. While these two blocks hit bid-side, ISEE sentiment data indicate opening customer call buying. In fact, of the 3,600 Best Buy calls traded on the ISE today, 84 percent are opening customer call buys. Meanwhile, implied volatility is moving up to 48.5 from 47 late Friday and the bullish trading in the electronics retailer comes ahead of a shareholder meeting Wednesday.

Houston-based oil driller Smith International (SII) is down $1.29 to $25.22, as a pullback in crude oil weighs on the drillers Monday. Crude was recently down $2.42 to $67.13 a barrel. However, while SII shares are falling, sentiment seems bullish. July 30 calls are the most actives, with 3,250 traded and 80 percent of today’s volume hitting ask-side. Another 1,290 July 37.5 calls traded, with 70 percent traded ask-side. While today’s volume doesn’t yet exceed open interest, ISEE sentiment data indicate that some customers are buying to open. Implied volatility is up to 62, from about 58 late Friday.

Another interesting note about the recent activity in SII, on June 12th, when shares were trading for $30.50, put buyers were active in the oil driller and positioning for shares to move lower. The timing was good because shares are down 17.6 percent since that time (chart).

Early indications point to a sluggish start to the trading week. About an hour before the opening bell on Wall Street, stock index futures indicate that the Dow Jones Industrial Average might slide more than 80 points at the open.

Stock index futures fell, along with major averages across Europe and key commodities, after the World Bank cuts its outlook for 2009 economic growth. The World Bank says the global economy will shrink 2.9 percent this year, which is a significant revision from the 1.7 percent decline previously expected (Link to story.)

Stock indexes across Europe are in the red. France’s CAC 40 slipped 1.7 percent, Germany’s DAX is off 1.5 percent, and UK’s FTSE slid 1.2 percent.

The dreary economic outlook is taking a toll on some commodities as well. Crude oil fell $1.55 to $68 a barrel, gold gave up $13 to $923.30 an ounce, copper lost 3.6 percent to $4,850 a metric ton, and aluminum retreated 3.7 percent to $1,618.75 a ton. Look for early weakness in the energy, metals, and mining names.

Meanwhile, Apple Computer (AAPL) edged lower after the Wall Street Journal reported Steve Jobs received a liver transplant two months ago. Jobs has been on medical leave since January and is recovering well, according to the article.

Among the bright spots, Marvell Technology (MRVL) is up more than 3 percent after raising revenue guidance for the quarter ending in August. Anglo American (AAUK) gained more than 7 percent after the miner received a takeover offer from the Xstrata. Wal-green (WAG) is holding slim gains after reporting quarterly profits of 56 cents per share, which missed estimates by 3 cents, but revenues rose more than expected.

With no economic news to guide the morning action, bonds are holding gains on the slower economic growth outlook. The benchmark ten-year Treasury is up 15/32nd and yields 3.72 percent.

Finally, the dollar fell .39 to 95.87 on the Japanese yen. The euro is off .0101 to 1.3835 on the buck.

Economic data and the Federal Reserve will impact trading in the week ahead. Read More.