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When buying a stock, I've found historically that looking at options volume is a great indicator for one simple reason: They provide fantastic leverage for investors. Each contract allows for an investor the right to buy (a call contract) or right to sell (a put contact) 100 shares, meaning if a stock currently costs $20/share, but the call premium is only $1, this gives the investor 20 to 1 leverage. Therefore, if I'm an investor and extremely confident about an upcoming earnings report, related news event, etc. I'd look to the company's options rather than just buying the common stock outright as I described here. These companies below had options volume that caught my eye on December 6.

Hecla Mining (HL), together with its subsidiaries, engages in the discovery, acquisition, development, production, and marketing of silver, gold, lead, and zinc. There was a massive 77,863 Jan 6 call contracts that changed hands and being bought aggressively at the asking price denoting bullishness. HL is a relatively cheap precious metals stock at a trailing 15x P/E, 10x forward P/E, 4x EV/EBITDA, virtually no debt and strong $400M net cash position, and decent 1.3% dividend yield. I think precious metals will move higher and this is a nice in the money call to benefit from the upside.

Bank of America (BAC), through its subsidiaries, provides banking and financial services to individuals, small- and middle-market businesses, corporations, and governments. BAC had unusual options activity recently that we brought up here, and close to 60,000 Dec 6 calls were bought on Dec. 6 showing bullishness. However which such a short timeframe I think this is too much of a gamble for me and BAC is still too toxic for me to buy above $5/share.

Eli Lilly and Company (LLY) develops, manufactures, and sells pharmaceutical products worldwide. There was strong bearish activity on Dec. 6 with almost 8,500 Jan 30 puts being bought aggressively at the asking price. We brought up recently here some other cheap pharmaceutical names and believe with LLY at just a 10x trailing and forward P/E, 5x EV/EBITDA, and consistent 5% dividend yield that it is a buy as well and wouldn't follow this bearish activity.

Commercial Metals (CMC) engages in recycling, manufacturing, fabricating, and distributing steel and metal products, and related materials and services worldwide. CMC had unusual volume that we brought up recently here and particularly strong volume on Dec. 6 in the Jan 14 calls and Jan 12 puts with each having over 5,000 contracts traded. This looks to be a bet on volatility which is understandable as Icahn's $15/share cash bid is getting a lot of resistance. However, that is only for the most speculative trader and would advise against this essential gamble.

Frontier Communications (FTR) provides regulated and unregulated voice, data, and video services to residential, business, and wholesale customers in the United States. FTR recently had bullish insider activity and there was a massive 48,000 Dec 5 calls changing hands against only 2,500 in open interest. This looks to be a simply ex-dividend option play that occurs on Dec. 7. Either way, FTR has enticing valuations at 1.1x P/S, 1.2x P/B, just over 5.5x EV/EBITDA, and enticing 13.5% dividend yield. Look to go long the stock and sell covered Jan 2013 5 calls going for $1.

Xilinx, Inc. (XLNX) designs, develops, and markets programmable platforms worldwide. There was particularly strong volume in the Mar 33 puts trading over 2,500 contracts against only 368 in open interest. This looked to be bearish though as the investors were selling aggressively at the bid price showing that they feel $33 is the bottom for XLNX and/or a price they'd like to own it. The stock is a decent holding at 15x trailing P/E, 16x forward P/E, 1.5x PEG, very strong net cash position of approximately $1B, and nice 2.3% dividend yield. This would be a nice put to sell for investors bullish on XLNX.

Reynolds American (RAI), through its subsidiaries, manufactures and sells cigarette and other tobacco products in the United States. There was very strong in-the-money call option volume as an ex-dividend play on Dec. 7, much like FTR. I wouldn't look much into this and look to hold the stock and benefit from its 5.4% dividend yield, however I'm bearish on tobacco as the long-term revenue decreases and increased government taxes will eventually destroy this industry.

Source: 7 Notable Stocks With Unusual Options Activity