Rally in the homebuilders, GE leads the Dow, Heavy trading in the financials, Spread trading in NOK and AUY.

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Some less actively traded names seeing bullish order flow: QLogic (QLGC), OptionsXpress (OXPS), Energy Transfer Partners (ETE) Bearish order flow: Coinstar (CSTR), PAR3 (PAR), Zygo Corp. (ZIGO). Post Earnings/Same Store Sales: Sears Holdings (SHLD), Abercrombie (ANF), Lennar (LEN), Bed Bath and Beyond (BBBY) Pre-Earnings: Apollo Group (APOL) Ex-Div Activity: PNC.

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

OSI Systems (OSIS), which has been rallying since Jan 24 as a play on increased airport security, is up another 27 cents to $28.72. The company makes body scanners and other products to inspect baggage, cargo, vehicles, etc. In the options market, recent trades include a Feb 25 – 30 risk-reversal, 1000X on PHLX. Looks like the strategist paid 85 cents to buy calls, sell puts, and open a new position.

GE added 90 cents to $16.35 and easily the best percentage gainer in the Dow Jones Industrial Average midday Thursday. The reason for the strength isn’t entirely clear, but the company did just announce that one of its units signed an agreement to deliver 50 new AC44i locomotives for freight transport. In the options market, sentiment seems somewhat bullish as well, with 152K calls and 49K puts traded. No big prints today. The top trade is 2,100 Mar 17.5 calls on the bid at 33 cents and appears to be a part of a buy-write. Indeed, there have been several “derivately priced” equity blocks today and four blocks of 1 million GE shares or more changing hands today.

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

MBIA (MBI) is up 56 cents to $5.07 and options volume is running 7X the usual, with 36K calls an d 2,280 puts traded. The action includes 15K Jan 5 – 6 call spreads sold at 20 cents and tied to 510K shares at $4.90. The spread might be a roll up in strikes. Possibly a bet volatility will pick up next week (if they are short stock, long Jan 6 calls).

The homebuilders are seeing relative strength and options action Thursday morning after Lennar (LEN) reported a surprise 19-cent profit. Analysts were expecting a loss. SPDR Homebuilders Trust (XHB) is up 47 cents to $15.98 and XHB Jan 16, Feb 17, Mar 16 calls seeing interest. Also seeing some action in LEN Jan 14 calls, Jan 12 puts; DHI Jan 12.5 calls, Feb 12 calls, and May 10 puts; and BZH Jan 5 puts and calls.