Brisk trading in Ford Motor (F) Monday, as shares break above a Jan 11, 2010 high and hit levels not seen since March 2005. Shares are up 52 cents to $12.26 and 190K calls traded on the automaker. The action includes the purchase of 20.75K Jan 15 calls at 87 cents each (tied to shares on a 35 delta), Mar 12 – 13 call spreads, bot at 41 cents, 4745X, and a Mar 12 – April 13 (1X2) call ratio spread, bot at 10 cents, 5000X.

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

After hitting a low of 58 cents per share early, Cell Therapeutics (CTIC) saw a morning spike and is flat at 67 cents on reports a date has been set for an FDA review of an NDA for CTIC’s pixantrone for non-Hodgkin’s lymphoma. The meeting was due to take place on Feb 10, but delayed due to weather issues in DC area. The new date is March 22 and, since it lies outside of the March expiration, option players are focused on April and June 1 calls. In April, 12.8K $1 calls traded. 82 percent at the Ask and open interest is 1,822. So, some investors are likely buying calls rather than shares as a cheaper way to play the FDA news. With implied vols near 220, the options aren’t really that cheap, however.

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

Comcast sees notable transaction in 2012 LEAP puts as 12,500 of the $12.50 puts and 2,000 of $15 puts trade in what appears to be 1×6 ratio spread for $5.10 net credit. Shares of CMCSA had hit an eight low of $11.10 back in March of 2009 so this appears to be a bet that shares will not sink back below that level in coming years. Of course it is also potentially a hedge.

Alliance Techsystems shares are up 20c to $79.65 and option volume is 2x the daily average driven by an August $80/$90 call spread which was purchased 1,000x for a $3.50 net debit. Shares of the Minneapolis based aerospace company had slid 18% from a $92 down to $77 during the first six weeks of the year on concerns of NASA budget cuts.

CBOE Volatility Index (.VIX) is up .19 to 19.69 despite a 6.5-point gain in the S&P 500, as investors brace for a busy week of economic news — including ISM and construction spending in about 7 min. and monthly jobs Friday. In the options market, one player seems to be bracing for volatility in the VIX and bought the Mar 20 staddle at $2.50, 25000X in early trading Monday. It might close an existing position because open interest is sufficient to cover in both contracts.

Stocks are indicated modestly higher on better-than-expected consumer spending data and a round of merger news Monday morning. Thirty minutes before the opening bell on Wall Street, stock index futures indicate that the Dow Jones Industrial Average might add 30 or 40 points at the open.

Stock index futures rose after the Commerce Department said consumer spending rose at a .5 percent rate in January, which was a bit better than the .4 percent increase that economists had predicted. Meanwhile, incomes rose just .1 percent and much less than the .4 percent increase that was expected.

Attention turns to the ISM manufacturing index and construction spending numbers at 10:00 a.m. eastern time. Economists expect ISM to slip to 58 in February, down from 58.4 the month before. Construction spending probably fell by .6 percent in January, according to economists.

Bonds are holding modest gains ahead of te news. The benchmark ten-year Treasury is up 2/32nd and yields 3.6 percent.

The dollar added .36 to 89.20 against the yen. The euro edged down .0082 to 1.3521 against the buck.

Action in the commodities markets is mixed. While crude oil added more than 70 cents to recapture $80 a barrel, gold slipped $2.90 to $1116 an ounce.

Meanwhile, AIG shares rallied 13.8 percent on news it will sell its Asia operations to UK’s Prudential PLC for $35.5 billion in cash and stock.

A series of other mergers was announced. Germany’s Merck KGaA is taking out Millipore (MIL) for $7.2 billion. MIL is up 11 percent. RiskMetrics (RISK) jumped 13 percent after MSCI made a bid for the company. OSI Pharmaceuticals (OSIP) received an offer from Astellas Pharma, which sent OSIP soaring more than 45 percent.