Darden Restaurants (DRI) is down and implied volatility in the options on the stock is up after the company issued a warning for the second quarter and full year. Shares are off $5.50 to $42.23. Options volume is 15,000 puts and 7,500 calls, which is 13X the daily average for the restaurant operator. The top trade is a multi-exchange sweep of 1846 Dec 43 puts at $1 when the market was $1.0 to $1.10, which might be a liquidating trade. 4784 traded against 2858 in open interest. Dec 42 and 45 puts are seeing interst as well. Jan 48 is the most active call option in DRI. Meanwhile, overall levels of implied volatility are up 7 percent to 34, as the focus will next turn to the company’s actual earnings report — which is due around Dec 19.

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

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

3,855 calls and 350 puts traded in International Game Technology (IGT) today. Shares are off a dime to $17.40 and the flow is concentrated in Dec 18 calls. 3,113 traded against 580 in open interest. The action includes a multi-exchange sweep of 2840 contracts for 30 cents when the market was 25 to 30 cents. Looks like upside call buying and implied volatility in the options on the stock is 4 percent higher to 37. Shares are off a bit today, but up 7.4 percent since 11/23. Credit Suisse maintained an Outperform rating and $24 price target on IGT Tuesday.

CBOE Volatility Index (.VIX) drifts down .24 to 27.60 and is now off nearly 20 percent since 11/25. Noteworthy trades on the market’s “fear gauge” Tuesday morning is a Dec 35 – Feb 55 call spread sold at 15 cents, 55000X. Feb 55 calls were bought and the action might roll a position in Dec 35 calls, as open interest in the contract is 229,455 — currently the biggest position in the volatility index — and the contract expires in 14 days (Wednesday after the standard expiration). If so, the strategist is buying two more months for the trade to play out and rolling the position up 20 strikes. VIX hit its best levels of the year on 8/8 when the index rallied to 48.