Big Print in the S&P 500 pit after the SPX Feb 1360 – 1370 call spread trades at 25 cents, 21225X. 30,000 total. SPX is up 6.45 to 1,297.63 and this spread, which was sold, is cheap because it is more than 60 points out-of-the-money with 22 days left till expiration.

CBOE Volatility Index (.VIX) is up .79 to 18.44 and probing its 2011 closing high of 18.47 set Friday. The “fear gauge” is up today, as the S&P 500 loses 4.5 points and trading turns a bit more cautious ahead of tomorrow’s FOMC meeting. A flood of earnings releases along with economic numbers later this week (New Home Sales tomorrow, Durable Goods Thursday, and GDP Friday) add some event risk as well. 7.5 million calls and 6.8 million puts traded so far, which reflects a bit more put activity (relative to calls) than seen in recent weeks. Meanwhile, trading in VIX is light, but seems to reflect concerns about volatility in the short-term as well. 145,000 calls and 42,000 puts traded on the volatility index so far. March 24 calls are the most actives.

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

BofA (BAC) loses 47 cents to $13.45 and BAC Feb 15 call is today’s most actively traded options contract. 70,500 on the tape so far. The top trade is a block of 3,618 on the 7-cent bid. It might be a liquidating trade on diminishing hopes for a move beyond $15 by the Feb expiration in 24 days. Open interest in the contract, which is now 11.5 percent out-of-the money, is 214,214.

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

Star Scientific (CIGX) saw a spike to $2.08 this morning after a US Patent and Trademark Office ruled in favor of the company related to a patent re-examination case. Shares have given up most of the gains, up just 2 pennies to $1.73. Meanwhile, some investors have been paying a nickel and a dime for Feb 2 calls. 11,650 traded. Feb 1.5 puts, Mar 2 calls, May 2 calls, and Aug 2 calls are seeing interest as well. 15K calls and 1,015 puts have changed hands. Earnings come into play early-Feb. The Petersburg, VA cigarette maker posted a $4.8 million loss when earnings were last reported on 11/10.

Murphy Oil shares are off $1.02 to $71.05 and notable early transactions in the Feb. $65 puts and $75 calls as each trade 1,500 contracts; looks like puts sold and calls bought for a 55c net debit. Open interest is in each strike is sufficient to cover but this could be a bullish r/r tied to stock as part of a volatility play ahead the company’s earnings report set for tomorrow after the close.