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M - Macy's, Inc. - Shares in the operator of department stores, Macy's and Bloomingdale's, are on the rise today, up 1.75% at present to stand at $39.37 as of 11:35 a.m. in New York, after Redbook reported U.S. weekly same-store sales increased 1.6% year-over-year in the prior week. Bullish positioning in Macy's options this morning suggests some traders are preparing for shares in the name to extend gains this week and perhaps through the end of the calendar year. The bulk of the volume in Macy's options today is in the front month calls, with more than 6,400 contracts in play at the Nov. $40 strike against open interest of 2,295 positions. Most of the $40 strike calls appear to have been purchased this morning for an average premium of $0.18 apiece, thus positioning buyers to profit should shares rally another 2% to exceed the average breakeven price of $40.18 by expiration at the end of the week. Traders establishing bullish positions on the stock in December expiry calls may be looking for Black Friday and the frenzied holiday shopping season to drive up traffic in stores across the country and the price of the retailer's shares. The Dec. $41 and $42 strikes are humming with activity today, with upwards of 2,800 calls changing hands at the $41 strike against open interest of 422 contracts.

VALE - Vale S.A. - Options activity on Brazilian metals and mining company, Vale, this morning indicates one or more traders are bulking up on upside calls to position for the price of the underlying to rebound during the next couple of months. Shares in Vale are off their lowest level of the day; down 0.70% at $17.86 as of 12:10 p.m. ET. The Jan. 2013 $18 strike calls are seeing the most action today, with volume topping 27,000 contracts in the first half of the trading session. Traders appear to be purchasing most of the $18 strike calls, shelling out an average premium of $0.90 per contract. Call buyers stand ready to profit at expiration next year should Vale's shares increase 5.8% over the current price of $17.86 to surpass the average breakeven point at $18.90. Shares in the iron ore producer last traded above $18.90 back on November 6th, but have not managed to close above that level since September 20th.

APD - Air Products & Chemicals, Inc. - The commodity chemicals producer popped up on our 'hot by options volume' market scanner this morning due to heavier-than-usual activity in November expiry puts. Shares in Air Products & Chemicals are up 1.25% to stand at $80.96 as of 12:20 p.m. ET after the stock was raised to 'buy' from 'neutral' at Goldman Sachs. The stock has rallied 5% in the past three weeks, having rebounded off a three-month low of $76.78. Options traders driving volume in the Nov. $80 strike put traded nearly 2,500 contracts and appear to have purchased the bulk of the put options for an average premium of $0.43 apiece. Put buyers may be locking in recent gains through expiration or positioning for the price of the underlying to reverse course during the next few trading sessions. Profits, or downside protection, kick in if shares in APD decline 1.7% and breach the average breakeven point at $79.57.

Source: Tuesday Options Brief: M, VALE & APD