Temple Inland (TIN) is under fire today and implied vols are up amid active trading in the options on the Austin, TX paper company. Shares are down 17.2 percent to $20.57 on reports the company is being sued for “loading up Guaranty Financial with risk securities, and contributed to its failure,” WSJ. Options volume in TIN is 20,000 calls and 12,000 puts. The top trades were initiated by one player. They sold 5000 Jan 32 calls at 22 cents, sold 1,000 Jan 30 calls at 53 cents, and bought 1500 Nov 29 calls at 60 cents. Open interest is sufficient to cover and the contracts are now deep OTM. So, it’s possibly closing activity. Sep 24 puts, Sep 25 calls, Nov 24 puts, and Oct 26 calls on Temple Inland are seeing interest today as well and implied volatility in the options has rallied 65 percent and is now elevated at 115.