Trading is very heavy in Citi (C) during the first hour of Wednesday’s session. 179K calls and 275K puts traded in the bank, which is 4X the typical volume. Jun 4.5 puts are the most actives. 93,500 traded. Shares are off 2 cents to $4.67 and some investors might be selling these puts after yesterday’s 4.5 percent slide in the share price. 62 percent of the volume has traded on the bid. Mar 4.5 and Jun 4 puts are busy as well. Meanwhile, Jan 7.5 calls have traded 64000 contracts (53 percent Bid). Implied volatility is up 6 percent to 34.5, as options volume picks up and Citi shares fall for a third consecutive day.

Volume is respectable today. In the exchange-traded funds, for example, 4.2 million puts and 2.8 million calls traded (in Flow Monitor, use symbol @ETF for ETF volume and symbol @ALL for total volume). Five of the top six most actively traded ETF options are SPY puts. The XLF March 16 puts, which was the subject of a fly trade today (see today’s XLF color) is the second most active. Meanwhile, US Oil Fund (USO) options volume is running 2.5X the average daily after 286K contracts traded. 72 percent is on the call side of the chain following today’s spike in crude. UCO is also seeing increasing volume. 105K options traded in the Ultra Short S&P 500 (SDS). Finally, some of the sector funds, including Select Sector Industrials (XLI), SPDR Metals and Mining (XME) and Select Sector Consumer Discretionary (XLY), have seen an uptick in put volume.

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

CBOE Volatility Index (.VIX) is up 4.38 to 20.81, near session highs and its best levels since early-December, as the S&P 500 loses 24.17 to 1,318.74 and sits not far from its worse levels of the day (1,317.55). Today’s total index put volume is approaching 500,000 contracts, which is about 1.4X the expected for midday. 270,000 are SPX puts. Another 150,000 VIX puts changed hands. Overall, the sentiment is clearly more cautious than seen in recent weeks, but certainly not consistent with panic levels or extreme fear thus far.

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

Delta Airlines (DAL) lost 85 cents to $10.65 amid weakness in the airlines on worries about rising fuel costs after crude oil launched more than $5 higher to $95 a barrel. Options order flow in Delta seems somewhat bullish, however, after 24000 calls and 6,275 puts traded in the name. The top trade is a Mar 11 – 12 call stupid spread, where the investor bought both contracts for a total premium of 63 cents, 1500X. Sep 12 calls are the most actives. 8542 traded. April 11 and June 13 calls are seeing active trading as well. Meanwhile, implied volatility jumped 23 percent to 48.5.

Ford (F) gapped lower at the open and is trading down 29 cents to $15.48. Early options action includes 23,700 Mar 15 puts. The top trade is 1,643 contracts at 33 cents when the market was 30 to 33 cents. Looks like put buyers are taking positions and implied volatility is up 13.5 percent 34. March 16 calls are seeing interest as well. 16,845 traded (56 percent Ask). The automaker announced today that it will release its February auto and truck sales numbers one week from today, on Mar 1 at Noon ET.