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Emerson Electric (EMR) gapped higher and is up $1.42 to $37.45 after the co. announced a global sales alliance with Sun Micro (JAVA) to provide businesses with technologies to increase productivity and energy efficiency at datacenters (link to story). In the options market, EMR volume is running 4X the usual, with 9,400 calls and 5,200 puts traded. Aug 36 calls are the most actives, with 3,900 traded and 80 percent trading ask-side. A floor contact confirms that buyers are driving the action, snapping up 3000 for $2.00 a contract. Looks like buyers of Aug 37 calls, Aug 40 puts and Sep 41 puts as well. Implied vols at 36 (+1)

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

Interest in Moody’s (MCO) puts continues. Open interest increased from 79.1K on July 20 to 152.4K today, or 92.7 percent (chart). Open interest in Moody’s puts increased by 19K contracts in the most recent session, compared to a decline of 166 in MCO calls. Shares fell yesterday and are are down $1 to $24.52 today after the company reported (wednesday a.m.) better than expected earnings and revenues, but issued downside guidance for the fiscal year. Another 13K puts traded today, compared to 1,450 calls. While some of the trades are likely closing, ISEE data indicate 45 percent opening customer buyers. Implied volatility is up as well, to 53, from about 51 the day before.

Ivanhoe (IVN) is up 20 cents to $7.53 and it looks like an investor bought the Dec 7.5 – 10 call (1X2) ratio spread 2500X and collected a nickel on the PHLX–possibly a close or a roll.

Update (7/31: 10:20): Open interest data indicate new positions in both contracts. Therefore, this looks like a bullish 1X2 ratio spread, where the strategist bought 7.5 calls and sold 2X as many 10 calls. Most brokers require extra margin on this type of spread because the investor has 2X more short calls compared to long calls and is therefore “naked” on some of those Dec 10s. One way to create a similar risk-reward, without the extra margin, is to also buy the Dec 12.5 calls and create a butterfly instead of a ratio spread.

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

Rambus (RMBS) is up 82 cents to $17.02 and 11,000 calls traded, compared to 1,500 puts (chart). The call volume represents 6X the expected for the first 90 minutes of trading and is focused on the Aug 17s and 18s. About 7,400 traded and about two-thirds hitting ask-side. The top trade is 712 Aug 17 calls on the ISE, which is an opening customer buyer, according to sentiment data. Implied volatility is moving up to 66, from about 61 the day before. Today’s heightened volume and volatility in RMBS comes amid renewed (and unsubstantiated) takeover chatter–Briefing.

Infinera (INFN), a Sunnyvale, CA communications equipment company, is off a nickel to $7.25 and options volume is running 10X the normal, with 5,270 puts and 20 calls traded. The top trade of the day is 153 Oct 7.5 puts on the CBOE for 90 cents. It appears to be part of a larger position and 3,840 now traded, compared to open interest of 5,750. Similarly, 1,509 Jan2010 7.5 calls traded, compared to open interest of 3,794. Implied volatility is easing a bit, to 49.5, and the activity is possibly closing trades, as INFN puts saw a big increase in open interest in early June when the stock was around $9 and $10 (chart). Some players might be taking some money off the table after the roughly 25 percent slide in the share price.