First Solar, Inc. (FSLR) – Bullish options activity appeared in the November contract despite the 2.5% decline in shares of the semiconductor company today to $116.98. A bull call spread on FSLR suggests one investor doubts shares will continue much lower. The trader purchased approximately 2,300 calls at the in-the-money November 115 strike for 4.75 each, spread against the sale of roughly the same number of calls at the higher November 120 strike for 2.44 apiece. The net cost of the transaction amounts to 2.31 per contract. Shares must recover through $117.31 in order for the contrarian trader to breakeven by expiration next Friday. Maximum potential profits of 2.69 per share are available to the call spreader if the stock rebounds up to $120.00. We note that FSLR traded as high as $120.14 during yesterday’s trading session.

DryShips, Inc. (DRYS) – Investors initiated bullish positions on the Greek drybulk shipping company. Shares of the firm rallied 1.5% to $6.32. Option traders favored the call spread today and utilized the strategy in the January 2010 contract to position for continued upward movement in the price of the underlying by expiration. Approximately 25,000 calls were purchased at the January 7.5 strike for an average premium of 45 cents each, spread against the sale of roughly the same number of calls at the higher January 9.0 strike for 15 cents apiece. The average net cost of the bullish transaction amounts to 31 cents per contract. DryShips’s shares must rally 23% in order for call-spreaders to breakeven at $7.81. Investors stand ready to accumulate maximum potential profits of 1.19 per contract if the stock surges 42% over the current price to $9.00 by expiration in January.

Priceline.com, Inc. (PCLN) – Third-quarter sales and profit at online travel agency, Priceline.com, exceeded analyst expectations and sent shares up 19% today to a new 52-week high of $206.78. PCLN posted earnings of $3.45 per share whereas previous forecasts averaged around $2.92 per share. Priceline raked in 30% higher sales of $730.7 million for the quarter. Investors initiated bullish stances on the stock by purchasing 3,200 calls at the November 210 strike for an average premium of 2.72 apiece. Traders will profit if shares of PCLN continue to rally another 4% and surpass the breakeven price of $212.72 by expiration this month. Nearly 1,000 call options were purchased at the November 230 strike for approximately 64 cents premium each. Investors long the November 230 strike calls could already reel in short term profits by selling the contracts, which now tote an asking price of 1.15 per contract. Option implied volatility imploded following earnings, falling 24%, to an intraday low of 42%.

AMR Corp. (AMR) – The operator of American Airlines attracted bullish option traders today as shares of the firm rallied approximately 1.5% to $5.74. Investors expecting shares to appreciate by expiration in December purchased call options. Approximately 7,000 calls were picked up at the December 6.0 strike for an average premium of 60 cents apiece. Traders also purchased about 4,000 calls at the higher December 7.0 strike for 30 cents premium each. Call-buyers at the higher strike may accumulate profits by expiration if shares of AMR increase at least 27% to surpass the breakeven price of $7.30.

CBOE Vix index (.VIX)– Equities traded either side of unchanged after nerves were soothed in the wake of the unemployment reading. Yet now that the Dow industrials average has reclaimed 10,000 and the earnings reports at eight-out-of-10 S&P 500 index constituents have beaten estimates, fear has once again slipped. This time last week saw heavy demand for the protection that option premium offers investors but a week later the vix index has slipped back to 24.73. There was contrarian call option buying to be found though. Investors bought 5,000 calls maturing in January at the 27.5 strike and twice as many calls at the 35 strike for what’s shaping up to be a rich 1.35 premium. Elsewhere there appears to be significant put selling at the December 22.5 strike where almost 28,000 lots have traded at 50 cents. Either someone has a strong desire to sit on an attractive 50 cent bid, making room for arbitrage selling or someone is abandoning a long position as the whole volatility trade goes sour.

CVS Caremark Corp. (CVS) – Shares dipped 22% lower to $28.13 as the trading session approached midday (EDT). Option traders employed both bearish and bullish strategies in the November contract, while longer-term investors were decidedly bearish on the pharmacy chain. Investors who are not yet ready to throw in the towel on CVS took advantage of today’s significant share price declines by buying out-of-the-money call options. The November 29 strike had 4,600 calls picked up for an average premium of 95 cents each while the higher November 30 strike attracted buying of 10,000 calls for a 68 cents premium. Other traders initiated bullish positions by selling 3,600 puts short at the November 26 strike for 38 cents each. Put-sellers pocket and retain the premium if shares remain above $26.00 through expiration. The short sale of put options at that strike implies traders are happy to have shares put to them at an effective price of $25.62 should the contracts land in-the-money. Bearish traders purchased 1,800 in-the-money puts at the November 29 strike for 1.50 apiece. Another 7,600 put options were scooped up at the lower November 27.5 strike for 76 cents each. Long-term uber-bearish traders bought 5,100 puts at the January 22.5 strike for 34 cents apiece. Finally, the May 2010 25 strike had nearly 3,000 puts picked up for an average of 1.60 per contract. Investors exchanged more than 133,950 contracts – a whopping 40% of existing open interest on the stock of 334,788 lots – before noon-time (EDT).

Newell Rubbermaid Inc. (NWL) – Shares of the global marketer of consumer and commercial products edged 1% higher today to $14.28, but options activity on the stock suggests shares may continue to trend upward. Rubbermaid-bulls bought nearly 5,000 calls at the November 15 strike for an average premium of 34 cents apiece. Another 2,000 calls were coveted at the December 15 strike where investors shelled out 60 cents per contract. NWL’s shares were trading at around $15.50 on October 22, 2009, before the market buckled and sent the stock back down to $13.96. Apparently call-buying investors expect shares to rebound to at least the breakeven price of $15.60 by expiration in December. The sudden demand for options drove implied volatility 20% higher to the current reading of 48% -- the highest level since July 30, 2009.

MEMC Electronic Materials, Inc. (WFR) – Option traders driving call volume in the November contract are in fact taking bullish positions on the stock by purchasing the options. We noted earlier today that heavier than usual option activity was driving implied volatility higher. Volatility is now up 20.25% to 68.92% versus this morning’s reading of 65.16%. Shares retreated slightly by lunchtime but are still up more than 1% to $12.45. Some traders targeted the in-the-money November 11 strike where 1,400 calls were picked up for an average premium of 1.49 apiece. Other investors selected the now in-the-money November 12 strike to take ownership of 2,900 calls for about 83 cents each. Bullish individuals expecting shares to continue higher paid an average of 49 cents to purchase 6,100 calls at the November 13 strike. The stock must rise another 8% to $13.49 before investors holding the November 13 strike calls breakeven.

E*Trade Financial Corp. (ETFC) – The Wall Street Journal reported that ETFC withdrew its application for funding through the Troubled Asset Relief Program (TARP) because the company’s “recent capital-raising and debt-reduction efforts negates the need for the money.” E*Trade raised $150 million by selling stock in the third quarter out of some $765 million of sold stock this year. The seemingly bullish news that the company no longer plans to participate in the capital-purchase program did not do much for the current share price, which slipped 6% lower to $1.37. Our scanners picked up on interesting options activity this afternoon that may or may not have been inspired by today’s news. It appears 95,000 put options sold at the January 1.0 strike for about 5.5 pennies apiece. One may infer the transaction represents bullish sentiment on ETFC if the sale of the put options is fresh activity. If this is the case, the trader pockets the 5.5 cents premium, and expects shares to remain above $1.00 through expiration. However, the sale could also be the work of an investor closing out a long put position given the already high reading of open interest at the small number of available strike prices.

AgFeed Industries, Inc. (FEED) – Shares of the Chinese feed and commercial hog producing company are trading 2.5% higher today to stand at $4.73. The firm received a ‘buy’ recommendation at EVA Dimensions yesterday. Option traders took to the May 2010 contract to initiate bullish positions on the stock. It appears a ratio risk reversal was established through the sale of 3,000 in-the-money puts at the May 5.0 strike for an average premium of 1.43 apiece, spread against the purchase of approximately 9,000 calls at the higher May 7.5 strike for 45 cents each. The transaction results in a net credit of 8 pennies per contract. Shares of FEED must rise and subsequently remain higher than $5.00 in order for investors to retain the full 8 cent credit received on the trade. Additional profits are available in the event that the stock rallies a whopping 59% from the current price to surpass the $7.50-level by expiration in May. Options trading volume of approximately 14,000 contracts today represents about 47% of total existing open interest on the stock of 29,805 lots.

Microstrategy, Inc. (MSTR) – The software company appeared on our ‘hot by options volume’ market scanner this afternoon due to bullish options activity. Investors initiated optimistic plays on the stock despite the 1% decline in shares to $73.03. Profit-taking action appeared in the January 2010 contract while fresh positions were taken in the April 2010 contract. It looks like one investor originally purchased 3,600 calls at the now in-the-money January 70 strike for an average premium of between 3.00 to 3.50 per contract back on July 31, 2009. Today the trader sold the calls for a whopping 7.20 apiece. Net profits enjoyed on the closing sale amount to a minimum of 3.70 up to 4.20 each. Thus, total potential profits earned by the trader are anywhere from $1,332,000 to $1,512,000. In the April contract a bullish risk reversal suggests investors expect the stock to rise significantly by expiration. The reversal involved the sale of 3,600 puts at the January 60 strike for 2.45 apiece, spread against the purchase of 3,600 calls at the higher April 85 strike for 3.70 each. The net cost of the transaction amounts to 1.25 per contract. Profits are available in the event that shares surge at least 18% to $86.25 by expiration day in April. We note that shares have not traded higher than $85.00 since April 30, 2008.