Cognizant Technology (CTSH) is down 4 cents to $48.12 and options volume is 5X the average daily. Most of the action is due to one strategist. They sold 13,000 Jan11 37.5 calls at $2.30 to buy 4700 Jan12 47.5 calls at $9.50. Looking at the open interest, this appears to be a roll out out of Jan11s — buying an additional 12 months and up 10 strikes. At $9.50 per contract, 4700 contracts opened in Jan12 47.5s represents a subsantial committed of capital (9.5 X 100 X 4700).

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

AMR is up 28 cents to $9.21 amid relative strength in the airlines (see UAUA color). Options action is heating up as well. March 10 calls are the most actives and includes blocks at 14 cents each on ISE, which are opening buyers, according to ISEE data. 11.8K now traded vs. 7023 in open interest. Apr 10 calls seeing interest as well.

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

UAL (UAUA) outperforms. The sector caught a bid early after the latest GDP numbers came in above estimates (Q2 at 5.9 percent vs. 5.7 percent consensus). UAUA shares then saw a morning spike and touched a new 52-week high. The stock was recently up 88 cents to $16.54, session highs, and some players might be closing out positions in March 15 puts. 6400 traded (vs. 41.9K in open interest).

Toll Brothers (TOL) is down 25 cents to $18.48 and options volume is running 3X the average daily ahead of housing numbers (10:00 a.m.). Most of the action is due to a June 18 straddle seller, collecting $3.10, 9200X and apparently opening a new position. It was not tied and probably a position in anticipation of TOL staying near the $18 level in the months ahead.

Stocks are set to open steady ahead of economic data Friday morning. Less than thirty minutes before the opening bell, stock index futures indicate that both the Dow and NASDAQ will open little changed.

Economic data will drive some of the trading. A GDP report released before the opening bell showed the US economy growing at a 5.9 percent annual rate in the second quarter, which was a bit better than the 5.7 percent rate economists had expected.

The Chicago Purchasing Manager’s Index [PMI] is due out at 9:45 a.m. eastern time. Economists expect the gauge of regional manufacturing activity to decline to 59.7 in February, down from 61.5 the month before.

The University of Michigan Sentiment Index follows at 9:55 and Existing Home Sales are scheduled for 10:00. The sentiment index is expected to edge up to 73.9 in February, up from 73.7 earlier this month. Existing homes sales are expected at an annual rate of 5.5 million for January, up from 5.45 million the prior month.

Bonds are holding modest gains ahead of the data. The benchmark ten-year Treasury is up 3/32nd and now yields 3.62 percent.

The dollar edged up .09 to 89.22 against the Japanese yen. The euro added. .0023 to 1.3555 against the buck.

Action in the commodities market is mixed. While crude oil is up 50 cents to $78.67 a barrel, gold lost $1.50 to $1107 an ounce.

Among the stocks to watch, AIG is down 6.5 percent after reporting a worse-than-expected $8.9 billion quarterly loss. Gap Stores (GPS) edged higher after reporting a 51-cent per share quarterly profit, which beat Street estimates by one penny. Hansen Natural (HANS) and Assured Guaranty (AGO) are also seeing post-earnings strength. LEAP, Crocs (CROX), and Fluor (FLR) are seeing post-earnings weakness. Motorala (MOT) is down 2 percent after UBS downgraded the stock to Neutral from Buy.