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Sentiment

Major averages are higher following a round of positive economic data Thursday. Weekly jobless claims numbers released before the opening bell on Wall Street showed a decrease of 3,000 to 420,000 in the period ended 12/11. Economists were looking for an increase of 3,000. Separate data showed Housing Starts increasing by 21,000 to an annual rate of 555,000 in November. Economists were looking for an increase of only 11,000. Stocks wavered at the open despite the data, but caught a bid shortly after the latest Philly Fed Survey was released at 10:00 eastern time. It showed improvement to 23.4 in December, from 22.5 last month and much better than the 13.0 that economists were expecting. The Dow Jones Industrial Average moved back into positive territory through midday and trading has been somewhat choppy Thursday afternoon. With 20 minutes left to trade, the Dow is up 44 points and about 80 points off session lows. The NASDAQ added 19. The CBOE Volatility Index (.VIX) lost .56 to 17.38. Trading in the options market is very heavy due to increasing volume in ETFs tied to ex-dividend activity. The Quadruple Witch expiration is playing a factor as well. 18 million calls and 6.8 million puts traded so far.

Bullish Flow

NASDAQ OMX Group (NASDAQ:NDAQ) touched a new 52-week high and is up $1.39 to $23.92 after announcing plans to buy back 22.78 million shares at $21.82 each. The stock is up on the news and options volume includes 5,575 calls and 625 puts. Jan 25 calls are the most actives, with volume approaching 4,000 contacts and 78 percent trading at the asking price. Dec 24 and Jan 24 calls are seeing interest as well.

Bearish Flow

The top options trade early Thursday a block of 25,280 Feb 13 calls on the CBOE. It was sold at 58 cents per contract, according to a source on the floor. It might be a closing trade. Volume is now approaching 40,000, compared to 144K in open interest. Shares are up 2.6 pecent to $12.60 Thursday morning and the best gainers in the Dow Jones Industrial Average after S&P raised its stand-alone credit rating for the bank late yesterday.

Implied Volatility Mover

Trading in Mastercard (NYSE:MA) and Visa (NYSE:V) is brisk Thursday afternoon, as shares fall on news a Fed staff has proposed debit card fee caps. The initial reaction to the headline was a move higher and MA hit an intra-day high of $254.01. Heavy selling ensued, however, and shares are now off $30.05 to $219.15 in very volatile trading. 24K calls and 37K puts have now traded in Mastercard. Implied volatility is up 21 percent to 39. Meanwhile, Visa gave up $9.86 to $67.08 and options volume includes 91K calls and 91K puts. Implied volatility is up 18 percent to 39.

Source: Thursday Options Recap