Family Dollar Stores (FDO) calls are active, the day after shares surged 21.1 percent on reports Nelson Peltz’s firm is looking to buy the company. Shares have given back 34 cents to $52.91 and today’s options volume of 15000 calls and 3,375 puts is 3.5X the average daily. In-the-money calls are the most actives. 5,356 March 50s traded (81 percent Ask) vs. 669 contracts of open interest. Another 3,560 April 49s traded (99 percent Ask) vs. 236 in open interest. Looks like some investors are taking new bullish positions in ITM calls and bracing for gains in shares over the next few weeks. Implied volatility, which jumped about 60 percent yesterday, is up another 14.5 percent to 40.

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

Human Genome Sciences (HGSI) is flat at $26.17 and 6,280 Mar 22 puts traded so far. 81 percent trading at the ask and open interest is 468. Implied volatility is up 4 percent to 81.5. Some investors might be hedging shares after a 9.6 percent gain in HGSI since 1/28 ahead of an FDA decision regarding the company’s pivotal Benlysta Lupus drug. It was postponed from late-December to March. Relatively high vols in March (98 percent) seems to reflect expectations for a decision prior to the March expiration.

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

Nabor’s (NBR), which saw heavy trading Tuesday ahead of earnings (see 2/15 color – Premium), is trading up 69 cents to $27.43 and has now added 5.7 percent since the results were released. Options order flow is bullish again today. Mar 27s are the most actives. 6,665 traded and, with 73 percent trading at the Ask and open interest of 2,525, it looks like buyers are dominating the action and opening new positions. Jun 29 and 31 calls are apparently being bought-to-open as well. Implied volatility is up 5 percent to 39.

China Agritech (CAGC) saw a big spike in implied volatility, as shares sank 19.2 percent and touched new 52-week lows Wednesday. 15,000 puts and 5,760 calls traded in the name. Implied volatility surged nearly 70 percent to a new 52-week high of roughly 154. The stock has been under pressure in recent weeks amid negative newsletter and brokerage commentary. On Feb 10, the company responded to an LM Research report, saying “management confirms that the Company’s factories are fully operational and revenuews which have been reported in accordance with US GAAP and audited by independent accountants are accurate.” Investors seem to have their doubts as the stock, which is up 24 cents to $7.68 early Thursday, has plummeted 41.8 percent since January 6.