Deutsche Bank (DB) surges $5.74 to $45.84 and a Nov 25 – 35 put spread is sold on the German bank at 22.5 cents, 15000X. It’s probably a liquidating trade on diminishing fears about the EU debt crisis. Looks like the spread was bought-to-open for $3.40, 14000X, on Sep 30. The underlying is up 32.6 percent since that time. Ouch.

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

Goodrich (GR) adds 46 cents to $122.52 and one player pays $4.31 for the May 120 – 125 call spread on the stock, 5000X. Volume in both contracts is more than 16,000 today and possibly adds to positions opened Friday, when the spread was being bought for $4.20, 4000X (see 10/21 color). Monday’s open interest data confirm that Friday’s action was new positions. Bullish flow in GR comes in front of earnings, tomorrow morning.

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

Bank of New York (BK) implied vols are moving higher amid increased put activity. Shares fell to $20.31 in mid-morning trading and are now up 18 cents to $20.92 on reports the bank is being sued for fraud. Massachusetts Secretary Galvin is charging the company with defrauding state pension funds of millions in foreign exchange transactions. Shares are seeing some volatility around the headline and options volume on the stock is 16,000 puts and 2,200 calls. Some players seem to be taking a “buy downside puts, ask questions later” approach, as Nov 18, 19 and 20s are seeing heavy trading on the news. Nov 19 puts are the most actives, with 4,890 traded (77 percent Ask). Meanwhile, implied volatility in BK options jumped 16 percent to 46.5, but still well below the highs of 69 seen in early-August.

40,000 calls and 11,000 puts traded on Valero (VLO) in the first hour Wednesday after UK’s Daily Mail reported that speculation has been making the rounds that Royal Dutch Shell “could get involved in a possible bidding war for Texas-based Valero Energy, which owns and operates 15 refineries worldwide”. Shares are up $1.93 to $23.77 on the news and the options volume is mostly scattered across a number of number of Nov and Dec puts and calls. November 23 puts are the most actives. 3,343 traded. Nov 25, Dec 24, Dec 25 and Dec 30 calls are seeing active trading as well. Meanwhile, implied volatility in VLO options is up 15 percent to 67, compared to a 52-week high and low of 81 (8/8) and 27 (12/20).

Interesting trade in VLO from 10/14.

Microsoft (MSFT) loses 37 cents to $26.82 and one strategist sells Jan 21 – 26 put spreads to buy Jan 30 calls on the software giant, collecting 58 cents on the 3 way, 28000X. Open interest is sufficient to cover, but this might be a new position, because the Jan 21 – 26 put spread has not traded in any substantial size in the past. The bullish three-way is tied to 1.22 million shares at $26.86 and comes just a few days after Microsoft released earnings.