Stocks finish mixed. Microsoft weighs on tech. Read More.

*Scanning all single-stocks subject to 2500 contracts minimum call or put volume

TriQuint Semiconductor (TQNT) shares are off some 5% to $6.52 but this is only a pullback that saw the stock run some 30% in the past week and more than 300% from the March lows which culminated with a spike to $7 following the company’s earnings report on Wednesday. Today someone appears to be using the recent strength to sell some call premium as 5,000 of the Sep. $7.5 were sold between 20c-25c. Implied vol, down 8% to 46% on the day.

*Scanning all single-stocks subject to 2500 contracts minimum call or put volume

Select Sector Homebuilders (XHB) is up 2 cents to $13.53 and making a run to session highs. 42.6K Dec 16 calls traded, including a block of almost 40K contracts on the ISE for 57.5 cents, which is an opening customer buyer, according to sentiment data. Meanwhile, another investor entered a substantial reverse diagonal–buying 20000 Sep 14 calls, while selling 20000 Dec 16 calls. The bullish flow comes the day after a report on June existing home sales improved more than economists expected. New home sales data are scheduled for Monday and the Case Shiller Home Price Index is due out Tuesday.

Qwest Communications is down 7 cents to $3.97 and options volume is running 2X the average daily ahead of a July 29 (before market) earnings release. Most of the action is in the January (2010) calls at the $5 strike and was part of a buy-write.

Recall that, in a “buy-write”, the investor normally sells 1 call for every 100 shares. In this case, the strategist sold Qwest call options for 20 cents against shares at $3.94. Since the multiplier for an equity options contract is 100, the sale of the call reduces the cost of owning Q shares to $3.74 (excluding commissions), which is now the downside breakeven or the risk of owning Q. Meanwhile, the upside through the January options expiration becomes limited by the strike price of the call, or $5. If Q is trading above $5 at expiration, the calls will be assigned and the investor must give up the stock for $5 per share and a 33.7 percent profit. Importantly, however, the trade can be closed or adjusted at any time prior to expiration.

For additional recent and “real-time” buy-write examples, click here. For real-time options news, buy-write and other options plays, click here.

Seeing some big prints in the financials this morning: 65K Wells Fargo (WFC) Oct 24 puts bought for $3.10 and 50K WFC Aug 17.5 puts bought for 20 cents. Both trades tied to stock at $23.25. 30K Citi (C) Aug 3 puts traded 2X for 51 and 52 cents on AMEX. C is down 8 cents to $2.70 and the trades are possibly closing. Select Sector Financial (XLF) Sep 9 – 11 put spread trades 50000X for 22 cents from b/d to b/d. Might be closing. XLF down 16 cents to $12.33.

Capital One (COF) is down a nickel to $27.78 after reporting a quarterly loss of 65 cents per share and 8 cents better than Street estimates of 73 cent loss. Investors might be more focused on the 6 percent increase in charge offs. American Express (AXP) is also lower today after the company reported a 48 percent drop in profits on increasing charge offs.

Credit Card Charge-Offs, Quarterly (source:federalreserve.org). Click chart to enlarge.

The bearish sentiment is being reflected in the options market, with one investor paying $3.85 per contract for 12,000 COF Sep 29 puts early. 16,7000 contracts now traded. Looks like buyers of COF September 25 puts as well.