9 of the 10 most actives today are May or June puts on the SPDR 500 Trust. The other is .SPX May1300 put. Therefore, the ten most actives are puts on the S&P 500. VIX is up 1.08 to 20.97 and hit a morning high of 21.67, which is not too far from last week’s intraday high of 21.59 set Wednesday morning. 3.7 million calls and 4.5 million puts have traded across all the exchanges in the first two hours. The projected volume of 10.3 milllion puts and 8.3 million calls yields a put-to-call ratio of 1.24, which would easily surpass the 2012 high of 1.15 set Friday.

Rackspace (RAX) loses $1.90 to $50.46 and options volume on the San Antonio, TX web-based IT systems service provider includes 6,670 puts and 765 calls. 5,000 Jun 50 puts traded on the stock for an average of $2.325 per contract on ISE. It’s an opening buyer, according to ISEE data. 30-day ATM implied vols are moving up 14.5 percent to 45.5, as some investors might be concerned that the stock will fall below a previous support levels just below $50 per share by mid-June. The stock sank 8.4 percent Tuesday after earnings were reported and are down another 4.1 percent since that time.

Interesting options volume stats Friday heading into the final hour of trading. 6.6 million puts and 6 millon calls traded across all the exchanges. The projected volume, of 7.3 million calls and 8.1 million puts, isn’t unusual, but yields a put-to-call ratio of 1.11 and one of the highest so far in 2012. CBOE Volatility Index (.VIX) is off the midweek highs of 21.79, but is ticking up .65 to 19.48. The cautious trading late in the week comes amid relatively volatile intraday market swings, but it’s interesting to note that, including a 1-point decline today, the average daily move in the S&P 500 so far this week has been just 4 points. The 30-day actual volatility of the S&P 500 is 12.6 percent. Therefore, VIX is possibly implyng an uptick in volatility heading into expiration week and into the sometimes volatile summer months. However, at 19.48, the index is still a far cry from the 45.45 seen in early-October.

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Auxillium Pharmaceuticals (AUXL) is up 44 cents to $18.62 and a May – Jun 20 call spread is apparently bought on the stock for $1.30, 2324X. The activity probably rolls a bullish position after the Malvern, PA biotech released earnings this morning. 30-day ATM vols are moving up another 7.5 percent to 72 and the term structure shows the highest vols are in the July options. The higher vols today and the skew are probably related to phase III trial results of XIAFLEX, which are expected by the end of the second quarter.

JP Morgan (JPM) is off 7.8 percent to $37.56 on heavy volume of 94 million shares and the Dow’s biggest loser after the bank late-Thursday reported a $2 billion trading loss. Options on JP Morgan are seeing heavy trading as well. 112,000 calls and 191,000 puts in the first hour, which is 3.5X the daily average. The top trade printed in the opening minutes after a 20,000-lot of Jun 35 puts was sold on JPM at 95 cents per contract. It was tied to stock and might close one leg of a spread from late-Jan when a JPM Jun 27 – 35 put spread was bought for $1.46, 20000X and tied to 500K shares at $37.39 (see 1/31 color). 28,247 Jun 35 puts now traded in JPM. Jun 36, Jun 37 and May 36 puts are the next most actives and 30-day ATM implied vols moved up 17.5 to 33, as players in the options market react to the headline and the big move in the underying stock Friday morning.

Paccar (PCAR) is off 64 cents to $39.84 and bearish flow is detected on the Bellevue, WA auto parts maker after multi-exchange sweeps of May puts traded on the stock in afternoon action Thursday. The largest is 965 May 39.3 puts for 62.5 cent per contract. 4,045 traded. May 37.3, 38.3 and 40.3 puts are also seeing interest and 30-day ATM vols are up 29.5 percent to 40. Share volume is 6 million and almost 3X the expected after the company received noticed from the SEC related to an investigation for reporting of financials from 2008 to 2011. The funky strike prices in PCAR options are the result of a contract adjustment due to a special 70-cent dividend paid earlier this year.

Tail Risk trade in the Qs (QQQ) as an Aug 50 – 56 put spread is bought on the ETF for 50 cents, 30000X, to open. QQQ is off 18 cents to $64.14 on the heels of the 10 percent post-earnings slide in Cisco and the Aug 50 – 56 put spread offers its best payout if the NASDAQ 100 falls by more than 22 percent through mid-August. Implied volatility in the Qs, as measured by the QQV Index, is down .47 to 19.84 today after a five-day 23.1 percent winning streak. It’s been moving a lot like the VIX, which 21-22 proving to be the upper end of the recent range. The put spread seems to be a bet on higher vols and is also taking advantage of skew. Implied volatility in the 56s is around 27 compared to 32 for Aug 50 puts.

Cisco (CSCO) is down $1.61 to $17.16 on disappointing guidance and one player seized the weakness to collect 23 cents on an Oct 16 – 19 bullish risk-reversal, 54500X. The big combo is possibly tied to 500K shares at $17.16 and looks like an opening position targeting a rebound in Cisco through mid-October. The stock had a brief stint above $21 per share at the end of the first quarter before coming under pressure early in the Q2. CSCO is now 19.4 percent below its Apr 2nd 52-week high.

Bold Trade in Cisco (CSCO) at Noon ET today after an 8000-lot of Weekly 19 calls trades on the networking giant for 45 cents per contract when the market was 44 to 45 cents. 22,199 Weekly 19 calls now traded, which makes it today’s fourth most actively-traded equity options contract. Cisco’s May 20 call is the third most active. 24,250 changed hands. Total volume is 125,000 calls and 50,000 puts, while 30-day ATM implied vols are moving up 3.5 percent to 37 ahead of this afternoon’s earnings release. The Weekly 19 straddle is trading at 5.7 percent of spot. Meanwhile, the one sigma post-earnings daily trading range based on skew is $17.15 to $20.44. Shares slipped 2.1 percnet on 2/9 when earnings were last reported.

Yahoo (YHOO) is off 7 cents to $15.29 and an impressive trade on the Internet giant today is a buyer of 57,000 Jan 20 calls for 36 cents per contract. Today’s volume, of 57,666, is a record volume day for the contract and easily surpasses the previous high volume day (of 18,698 contracts set on 2/7). Thefore, it seems likely that the hefty premium purchase is a new bullish position in Yhoo (and tied to 800K shares at $15.04). Jan 20 calls on the stock are 30.8 percent OTM, with a .19 delta and 84,829 in open interest. The stock has been chopping around in a range lately and is at the same levels today as seven months ago. The 52-week high of $18.84 dates back to a year ago today. The company is now embroiled in a new controversy related to recent headlines that CEO Scott Thompson had substantial misstatements on his resume. Yahoo said yesterday that it was setting up a special committee to investigate the hiring process. Today’s call buyer is possibly anticipating something more positive on the news front and for YHOO to break out its range by yearend.