Some less actively traded names seeing bullish order flow: Texas Roadhouse (TXRH), Mueller Water Products (MWA), Granite Construction (GVA) Bearish order flow: VF Corp. (VFC), Embraer (ERJ), Knight Transportation (KNX) Post Earnings: General Mills (GIS) Pre-Earnings: Nike (NKE), FedEx (FDX) Ex-div.: Tiffany (TIF), Dr. Pepper (DPS), National Semi (NSM), Provident Energy (PVX), DTE, Holly (HOC)

Alcoa (AA) shares rallied nearly 7 percent to $14.75 and are easily the best gainers in the Dow Jones Industrial Average on reports the company might begin to get discounts on power supplies in Italy. Alcoa said in November that it would temporarily idle smelters in Sardinia and Venice. However, under a new decree Sardinia and Sicily would be upgrade and industrial consumers like Alcoa would get discounts on power supplies. AA is up and options volume is running 4X the average daily, with 171K contracts on the tape so far. April 15 calls are the most actives. The top trade is a block of 8000 on the bid of 47 cents and marked “tied”, and so a possible buy-write. Also seeing buyers of Oct 15 and 20 calls. A seller of an April 15 – 17 call spread, 2000X. A buyer of July – Oct 15 call spread, 4000X. And, an April 13 – 15 “collar”, 2800X.

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

Crocs (CROX) is up 52 cents to $7.91 and seeing relative strength after Piper Jaffray analysts upped their price target to $9 from $8.50. The analysts met with management and said they have increased confidence in growth strategies, leadership, and opportunities in global markets for the company. They recommend CROX. In the options market, volume is running about the typical levels, but with clearly more action on the call side of the options chain. 1475 contracts traded, compared to 66 puts. The action is focused on Mar 7, April 8, Mar 8 and Sep 8 calls, with about 75 percent trading at the asking price.

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

Polycom (PLCM) gapped higher and is up $2.71 to $33.05 on 10X the average daily options volume after FT.com reported that Apax is in talks with the video game maker about going private. April 30 calls are the most actives, with 8815 traded. Some players might be exiting positions, as the contract is $3 in-the-money and was the subject of interest on Mar 11 and Mar 15 when shares were between $29 and $30. July 35 calls and April 30 puts are seeing interest as well.

Select Sector Basic Materials (XLB) with a four way trade yesterday that looked a lot like an iron butterfly — selling the June 32 straddle to buy the June 29 – 35 strangle, 10000X. However, looking at today’s open interest, looks like the Jun 29 – 32 call risk-reversal was closed to open a position in the bullish June 32 – 35 risk-reversal (However, also possibly a roll of a strangle up in strikes.)


Flow Monitor Tip: You can see the open interest changes each morning using Flow Monitor. You’ll get it here fast. In this example, enter XLB, then select option 5. To see more, enter + (you can do this several times.)

Stocks are indicated modestly higher on benign inflation data and strength in the commodities markets. Thirty minutes before the opening bell on Wall Street, stock index futures indicate that the Dow Jones Industrial Average might add 20 or 25 points at the open.

Stock index futures ticked higher after the Labor Department reported that the Producer Price Index [PPI], a gauge of inflation at the wholesale level, rose .1 percent last month, which was in-line with economist estimates. Stripping out food and energy, the core PPI fell .6 percent and three times more than expected.

Meanwhile, crude oil rose $1 to $82.70 a barrel ahead of weekly inventory data due at 10:30 a.m. eastern time. Gold is holding a $4 gain, to $1126.50 an ounce.

With no other data to guide the market action, bonds are holding solid gains on the tame PPI and the day after the Federal Reserve vowed to keep rates low for the foreseeable future. The benchmark ten-year Treasury is up 12/32nd and now yields 3.65 percent.

The dollar edged added .34 to 90.56 against the yen. The euro edged down .0007 to 1.3762 against the buck.

Among the stocks to watch, Hartford (HIG) is up 3.5 percent after announcing plans to raise funds to repay TARP. CIT is heading higher on news its credit quality approved in the final quarter of last year. Polycom (PLCM) is up 10 percent on an FT.com report that Apax is eyeing the company. Focus Media (FMCN) and LSI are up on earnings news. OptionsXpress (OXPS) is down 10 percent after the online broker reported disappointing monthly trading numbers.