CBOE Volatility Index (.VIX) is easing, down .57 to 23.98, and near session lows after the FOMC voted, as expected, to keep rates unchanged. The knee-jerk reaction was a sell-off, but the S&P 500 Index has now recovered the losses and is up 1.12 to 1093.29. The tone of trading was very cautious ahead of the news. 5.7 million puts and 5.6 million calls traded in today’s session. Now, some of the anxiety seems to be easing. After spiking to 27.32 Friday, VIX is down for a third time this week.

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

Apple Computer (AAPL) spikes lower as the company unveils it’s highly anticipated tablet. The new iPad looks like a giant iPhone (details). Investors might have been expecting something more ground-breaking because AAPL is now down $5.22 to $200.72. Options action is brisk, with 144K calls and 82K puts now traded.

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

Collective Brands (PSS) is flat at $19.49 and 10.2K Mar 17.5 puts. Implied volatility is up 5.4 percent to 55.2 and the top trade is 4182 contracts at the asking price of 85 cents on PHLX. Looks like a premium buyer. It might close, as open interest is sufficient to cover. No recent news on the Topeka, KS apparel retailer . Earnings expected early-to-mid March and before the March expiration.

Qualcomm reports earnings after the close today and early notable trade is a 1×2 put spread in March with 5,000 of the $47 strike spread against 10,000 of the $43 puts for a 45c net debit. Based on prior open interest this will translate into a new position.

A total of 44,000 Continental Airlines puts traded yesterday, 7x the typical daily put volume, as buyers scrambled for Feb 20 puts based on a recommendation made in the Stansberry Research S&A Short Report. Surge started 10mins into the day, with buyers paying 1.19 to 1.20 (51%IV) as shares traded near 19.75, and within an hour 20,000 contracts had traded up to $1.35, while shares didn’t budge. Shares traded lower into the afternoon, with late buyers paying up to 1.65 (61%IV) for small size. On the day, 35154 contracts traded in 2062 trades, with a vwap of $1.329. Clearing data confirms most of the flow was customer, and OI grew a relatively modest 12380 contracts.

Stocks are indicated mixed early Wednesday, with cautious trading expected ahead of new home sales data and the FOMC interest rate announcement. Less than an hour before the opening bell, stock index futures indicate that both the Dow Jones Industrial Average and the NASDAQ will open little changed.

Index futures are flat as investors await a report on New Home Sales, due at 10:00 a.m. Eastern Time. Economists expect to see improvement — to an annual rate of 366,000 homes in December, up from 355,000 the month before.

Investors are also waiting for word from the Fed. The Federal Reserve Open Market Committee [FOMC] wraps up a two-day meeting and issues a statement at 14:15. No changes in rates are expected, but the post-meeting message will be scrutinized for clues regarding future policy.

Bonds are steady in early pit trading ahead of the Fed. The benchmark ten-year Treasury is flat and its yield unchanged at 3.62 percent.

The dollar slipped .21 to 89.42 against the Japanese yen and the euro edged down .0009 to 1.4063 against the buck.

Meanwhile, crude oil is flat at $74.70 a barrel ahead of weekly inventory data (10:30) and gold lost $6.6 to $1091.70 an ounce.

Among the stocks to watch, Dow component Caterpillar (CAT) fell 4.5 percent after posting earnings that beat Street estimates, but revenues that fell short of expectations.

Yahoo (YHOO) gained 2.7 percent after posting a quarterly profit of 11 cents per share, which was in-line with analyst expectations. Rockwell (ROK), Altera (ALTR), and Gilead Sciences (GILD) are also up on earnings. AK Steel (AKS) added 2 percent after Goldman upgraded the steelmaker to Buy. Dow components AT&T (T), P&G (PG), and 3M (MMM) might see action today ahead of earnings, due tomorrow morning before the bell.