AMD adds $1.22 to $7.71 on earnings and multiple broker upgrades. Trading in options on the chipmaker is brisk today and includes a Jan 11 – 12.5 call spread bought at 11 cents, 6500X. It might roll a position down in strikes, as Jan 12.5s are deep OTM, even after today’s big rally.

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

Bullish trading continues in Etrade (ETFC). The action started Tuesday on unsubstantiated chatter that activist investor Icahn was taking a stake in the company and heavy trading continued Wednesday after Citadel disclosed a 9.8 percent position in the online broker (see 7/19 and 7/20 color). Today, shares are up 24 cents to $15.68 and the top options trade is a 7,380-contract block of Sep 18 calls at 34 cents on ISE. Sentiment data indicate an opening buyer. Separately, 5,000 were bought at 63 cents on PHLX. 11,391 Sep 18 calls on Etrade now traded. Aug 15 puts are the second most actives. Sep 16, Oct 16 and Oct 18 calls are busy as well. Meanwhile, implied volatility rallied 18 percent to 45, as investors take positions in anticipation of additional news on the buyout front.

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

Express Scripts (ESRX), which rallied 5.4 percent yesterday after the company announced plans to acquire Medco (MHS), is up another $1.46 to $56.81. A noteworthy recent options trade in ESRX is a four way spread, in which the strategist sold Jan13 40 – 42 “stupid” put spreads at $4.20 (sold both legs), 5000X, to buy the Jan13 60 – 70 call spread at $3.50, 10000X. All four legs of the spread look opening and the position seems to be a bullish play in anticipation of a move beyond $60 in ESRX shares through 2013. 30,000 calls and 12,000 puts now traded in the name. MHS is seeing action as well. Shares are up $2.17 to $66 and Oct 52.5 puts are the most actives. 4,508 traded. There’s some doubt about the deal clearing anti-trust hurdles. For that reason, perhaps, MHS closed Thursday almost $10 below the proposed takeover offer.

Verizon (VZ) is down $1 to $36.57 and one of 24 Dow stocks in negative territory through the first hour of trading Friday. Verizon reported a quarterly profit of 57 cents per share on $27.54 billion in revenues. The Street was expecting 55 cents on $27.43 billion. The whisper number might have been higher because shares were up 2.3 percent in the three days leading up to the report, but have given back those gains and a bit more today. Meanwhile, the top options trades in VZ today are part of a spread, after an investor bought 4,500 VZ Jan 31 puts at 64 cents and sold 4,500 Jan 30 puts at 49 cents. 15 cents was paid for the Jan 30 – 31 put spread and this might be a roll or exit, as open interest is sufficient to cover in both contracts. On the other hand, it might be an opening play targeting a move to $30 (-18 percent) or less through the Jan expiration.

SM Energy (SM) trades to new 52-week high of $80.81 today, but has since given back most of the gains and is up 41 cents to $78.88. Meanwhile, options volume in the Denver-based oil and gas company is running 11X the average daily after 13,000 calls and 380 puts traded in SM. Most of the volume is due to one “stupid” spread, in which the investor sold 5,000 Aug 90 calls at $1 and sold 5,000 Nov 90 calls at $2.70. Both legs look opening. A shareholder might have initiated these trades as part of an overwrite strategy. $90 calls on SM energy are currently 14.1 percent out-of-the-money. Shares have seen choppy market action in 2011, but have performed well lately and are up 28.3 percent from a month ago. Earnings will come into play on the afternoon of August 1.

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