Schaeffer's Options Center

MGM adds 67 cents to $10.23 and options volume is running 3X the average daily, with 47,000 calls and 12,000 puts traded so far. The top trade is a buyer of 10,000 January 2012 calls at the 17.5 line at $1.10 per contract at 13:55 on AMEX. Looks like they came back for more and bought another 10K at $1.10. More than 20,000 now traded. Sep 9, 10 and 11 calls are busy as well. Implied volatility in MGM is down 3.5 percent to 54 today after Soleil upgraded the stock to Buy from Hold.

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Bullish flow detected in Micron Technology (MU), with 28216 calls trading, or 2x the recent avg daily call volume in the name. Shares are off 17 cents to $6.58 and top trade is a block of 17,500 April 9 calls at 42 cents on ISE, which is an opening buyer, according to ISEE data. In fact, data shows that 25K calls have been bought to open on the chipmaker so far today. April 9s are most actives, with 25K traded. Implied volatility is up 4 percent to 55. No news on the stock. Shares are down about 42 percent since April 14 and today's call buyers might be anticipating a recovery over the next two quarters.

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JA Solar (JASO) gapped at the open and is up 66 cents to $7.14 after the company announced new supply deals totaling 500 megawatts. Shares touched a new 52-week high and options volume is 2.5X the average daily, with 4,700 calls and 315 puts traded in the Chinese solar cell maker so far. Sep 7.5, Oct 7 and Dec 7 calls are the most actives.

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Corning (GLW) adds 9 cents to $16.90 and the Feb 15 - 19 strangle is bought at $1.82, 3600X on AMEX. Looks like an opening volatility play on the glass maker. Meanwhile, other investors are focused on the Sep 17 puts, with 8,550 traded vs. 5,823 in open interest. The top trade is 2937 at 52 cents on ISE, when bid-ask was 51 to 53 cents. It's not clear if it was buyer or seller initiated, but implied volatility is up 5 percent to 35.

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Oracle (ORCL) is seeing relative strength and increasing options activity on news Mark Hurd, a former H-P CEO, has joined the software maker as President and member of Board of Directors. Goldman also added ORCL to its Conviction Buy List today. Shares are up $1.34 to $24.26 and options volume is running 2X the average daily, with about 44K contracts traded (through 12:30 ET.) Sep 25 calls and Sep 24 puts are the most actives. 27K calls and 17K puts traded total. Implied volatility is up about 8 percent to 34.

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Netflix is up $2.80 to $141.28, a new 52-week high and option activity is 2x the daily average. Some 20,000 calls to 11,000 put have traded. And within that activity the trade is two way and looks to be more about risk reduction as spreads are accounting for the bulk of the volume in what looks like a roll; September $140/$145 calls have traded 3,300 contracts in what looks opening or possibly a roll up in strikes, while the October $145/$150 call spread has 2,100 at each strike in what looks like opening transactions. Also looks like someone is using the weekly options to create a calendar spread of selling the $140 weekly and buying the Sep $145 call for a $2.00 net debit 1,500 times.

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CBOE Volatility Index (.VIX) is up 2.33 to 23.64 and moving to session highs, as the S&P 500 falls 10 points and heads towards morning lows. There doesn't seem to be a specific catalyst for the market slide over the past 10 minutes, but note that the financials - AXP, BAC, and JPM - are the biggest percentage losers in the Dow Jones Industrial Average. Shares of many financials are following European banks and the euro lower in morning trading Tuesday on renewed worries about the health of European banks. Energy-related names are also under pressure after crude oil lost $1.06 to $73.54 a barrel.

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The top options trades so far today are in the CBOE Volatility Index (.VIX) after the Sep - Oct 25 put spread trades at 45 cents, 58000X. The same spread traded yesterday and the action looks like rolling from one month to the next. Open interest in the Oct 25 puts increased by 54,880 to 129,900 following yesterday action and if today's block of 58K adds to it, then the increasing interest is likely to make the contract the second biggest position in the VIX; behind the Sep 25 puts, which have 289K of open interest. VIX is down 1.33 to 21.86 today and has now suffered a four-day slide of about 20 percent. The large blocks of puts on the VIX might be hedges of VIX futures.

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Sprint Nextel (S) shares are up a nickel to $4.39 and have now added 12.5 percent since Monday. Some players might be worried that the gains won't last, as a block of 20K Sep 4 puts recently traded at the 4-cent ask price. It might be a closing trade. Meanwhile, 8,000 Jan 4 puts also changed hands, including 4000 at the 38-cent ask and 4,000 at 37 cents. The Jan 4 puts look opening and marked "tied", so possibly a protective put or volatility play. Implied volatility in Sprint is down 4 percent to 48.5 today, compared to a 52-week high and low of 87 and 46.5.

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Urban Outfitters (URBN) adds 42 cents to $33 and options volume is 3X the average daily, led by a Sep 33 - 34 call spread, 3300X on ISE. Looks like it was sold at 45 cents and is possibly rolling up in strikes after a three-day 8.7 percent gain in the share price. URBN saw relative strength and was one of the best gainers in the NASDAQ 100 yesterday. The company is due to present at a Goldman Sachs Retailing Conference on 9/14.

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