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Stock market averages are holding modest gains, but are well off session highs late-Friday. Better-than-expected jobs data helped set the table for morning strength on Wall Street after the Labor Department reported that the US economy added 227,000 payrolls in February, which was about 20,000 more than economists had predicted. The unemployment was unchanged at 8.3 percent and in-line with expectations. Hourly earnings rose .1 percent and .1 percent less than expected. The headline number seemed to overshadow the day’s other data, which included a three-year high in the Trade Deficit during the month of January. Meanwhile, the euro gave up 1.2 percent to 1.31 against the buck, but stock market averages were little changed across the Eurozone after Greece reported final results from its debt swap with creditors. However, late-Friday in US trading, stock market averages came under modest selling pressure after ISDA announced that a credit event had been triggered by the Greek debt mess. While the news was expected, the headline seemed to offer an excuse to trim long positions ahead of the weekend. The Dow Jones Industrial Average is now up 23 points and 38 points from session highs. The NASDAQ has added 17 points. CBOE Volatility Index (.VIX) is off .61 to 17.34 amid relatively light volume in the options market. 6.9 million calls and 6.2 million puts traded across the exchanges so far.

Bullish Flow

Michael Kors (NYSE:KORS) is rallying to new highs today and is up $2.18 to $49.26 in active trading of 3.1 million shares, which is more than double the expected volume through midday. Options action in the Hong Kong-based apparel retailer is picking up as well, with 5,250 calls and 785 puts traded in the name so far. The activity is scattered across a variety of March and April call options. Mar 46, 49 and 50s are the most actives and levels of implied volatility in KORS options are being pushed 10.5 percent higher to 48. There’s no news on the stock today, but shares have surged 190 percent since its mid-December IPO of $17. The stock was the subject of bullish trading in early-February ahead of earnings. The stock then surged 27.5 percent after the results were reported on 2/14 and are up another 15.3 percent since that time. High volume and increasing vols today seem to reflect some expectations for additional gains in the days ahead. The stock hit a high of $50.69 earlier in the session.

Bearish Flow

Some investors seem to be bracing for heightened volatility in Zions Bancorp (NASDAQ:ZION). Shares of the Salt Lake City-based bank are up 19 cents to $28.50 today and a Mar 18 – 19 strangle was bought on the stock today for 45 cents, 5900X, to open. (March 18 puts were bought for 15 cents and March 30 calls for 30 cents). Yesterday’s options action included an Apr 16 – 18 put spread on ZION for 48 cents, 5400X, which was also opening. No news on the stock. Levels of implied volatility are around 34.5. The 52-week high and low are 84 (10/3) and 23 (5/27). Earnings will be reported again in mid-April. Shares slid 7.5 percent on 1/24 when profits were last reported.

Implied Volatility Mover

CBOE Volatility Index (.VIX) is off .87 to 17.08 and in the midst of a three-day 18.2 percent slide. Like yesterday, the top trade in VIX options is a buyer of Apr 19 puts. 16,000 were bought yesterday for 77.5 cents per contract to open. The same player bought 28,000 this morning for 90 cents per contract. The term structure of S&P options, and therefore VIX futures, has become very steep. Macro Risk Advisors pointed out in a note today that in July 2011, spot VIX was around 17.5 and seven-month futures were 23.5. VIX was just below 18 prior today and September futures were roughly 28.65. Although VIX is not far from July 2011 levels, seven month futures are 5 points higher. Simply put, it's steep (to get a sense of how steep, April 19 put purchases over the past two days might reflect the view that term structure will become less steep and/or the April forward VIX will converge towards the current spot VIX through the April expiration, which is in 39 days for VIX options).

Unusual Volume Movers

Bullish flow detected in China Mobile (NYSE:CHL), with 4434 calls trading, or 9x the recent average daily call volume in the name.

Bullish flow detected in Trinity Industries (NYSE:TRN), with 4215 calls trading, or 19x the recent average daily call volume in the name.

Bullish flow detected in Weyerhaeuser (NYSE:WY), with 7059 calls trading, or 7x the recent average daily call volume in the name.

Meanwhile, unusually high options volume is being seen in AIG (NYSE:AIG), Sprint Nextel (NYSE:S), and Molycorp (MCP)