Oil refiner Valero (VLO) is up $1 to $20.53 and options trading is brisk Wednesday, with 33,000 calls and 19,000 puts on the tape so far. The gains in the shares and the heightened options activity comes the day after Reuters reported that PBF Investments might be interested in buying VLO’s Paulsboro refinery in New Jersey. Shares are now not far from session highs and the options action is really scattered: March 20 calls, March 20 puts, Sep 23 calls, Sep 25 calls, April 21 calls, Mar 19 calls, Jan11 20 puts, Mar 21 calls, June 18 calls. Meanwhile, implied volatility is up about 2.5 percent to 32.

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

CBOE Volatility Index (.VIX) is up .29 to 18.21 and looking to extend this week’s winning streak. After falling during 17 of 18 trading sessions, VIX is up 4.5 percent since Friday and might be seeing some strength due to upcoming expirations — VIX options a week from today and then the “Quadruple Witch” next Friday. In the options, noteworthy trades in the VIX today include two large blocks totaling 80K May 35 calls on the bid of 45 and 50 cents per contract. These blocks printed in morning action and, since it looks opening, might reflect expecations that VIX is unlikely to make a signficant move higher by the VIX May expiration (69 days.)

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

Kinetic Concepts (KCI) is halted, news pending ahead of a trial verdict against Smith and Nephew. Shares are up 68 cents to $43.99 and options were active ahead of the halt, with 16K puts and 7500 calls traded. The top trades: 4700 and 4600 March 40 puts on the bid, 75 cents per contract. Looks like put sellers. Another player sold 1750 Mar 50 calls at an average of 37.5 cents. Implied volatility is up about 6 percent to 78.

The top equity options trade so far today is a block of 38K January 35 calls on Microsoft (MSFT). It was bought at 52 cents per contract and not tied to stock, according to a source on the floor. It might close an existing position, as open interest is 77.7K.

Norfolk Southern (NSC) is often considered the best managed rail company, but the stock is not at 52 week highs like it’s counterparts Union Pacific (UNP) and Kansas City Southern (KSU). That could change with a break of $55, which would target a move to $60. Option traders were decisively bullish Tuesday, with 4,425 calls trading, 3X average, and 90% offer side buys. The April and June $55 calls both saw buyers, with 2,800 in April $55’s changed hands. Shares trade 13.2X earnings and 18X cash value, and recently were raised to Overweight at Barclays with a $62 target. Recent improvements in pricing, shipping volumes, and improved outlook for coal were cited as reasons for the upgrade.

Early indications point to a steady open on a slow news day and very quiet trading across international financial markets Wednesday. About an hour before the opening bell on Wall Street, stock index futures hint at modest early gains for both the Dow Jones Industrial Average and the NASDAQ.

Stock benchmarks saw narrow trading overseas. Japan’s Nikkei finished down .04 percent and Hong Kong’s Hang Seng was unchanged. In Europe, France’s CAC 40 Index is up .3 percent, Germany’s DAX up .2 percent, and UK’s FTSE is flat.

In the US, the focus turns to the only economic stat of the day at 10:00 a.m. eastern time. A report on wholesale inventories is expected to show an uptick of .2 percent for January.

With no other news to guide the action, bonds are drifting in aimless trade. The benchmark ten-year Treasury is down 2/32nd and now yields 3.71 percent.

The dollar added .49 to 90.43 against the yen. The euro gained .0004 to 1.3602 against the buck.

Crude oil added .25 cents to $81.74 a barrel and gold rose $2.1 to $1124.40 an ounce.

Among the stocks to watch, Intermune (ITMN) launched 64.5 percent higher after an FDA panel voted to approve the company’s pirfenidone. Factset (FACT) jumped 66 percent after Abbott (ABT) made a $27 cash bid for the company. American Eagle (AEO) rose 5 percent on better-than-expected earnings. Navistar (NAV) lost 7 percent after reporting a quarterly profit of 23 cents per share, which fell well short of analyst estimates of 85 cents. Retailers will be in focus after the closing bell with a number of second tier names — Hot Topic (HOTT), Men’s Wearhouse (MW), Jo-Ann Stores (JAS) — slated to release results.