Schaeffer's Options Center

Medivation (MDVN) sees an afternoon spike, now up $1.60 to $12, on 4X average daily volume. 6860 calls and 650 puts traded. Sep 10 calls are the most actives, with 2700 traded and 96 percent at the ask. Sep 12.5, Oct 11 and Oct 12 calls are seeing interest as well. Top trade is 500 of the Sep 10s at the 80 cent ask price about 25 minutes ago. It's now bid at $1.84. Not clear what is driving the action.

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Visa (V) shares are down $2.38 to $66.17 and more than 50K options contracts traded on Visa so far today. Shares notched a new 52-week low after the NY Times ran story saying credit card use among consumers is declining and the day after BofA analyst slashed the rating on the stock to Undperform from Neutral. The options action seems mixed. Sep 65 puts and 70 calls are the most actives and seeing two-way (buying and selling) through midday. The action has been mostly smaller lots. The biggest trade is 792 Sep 70 calls on the 66-cent bid. Meanwhile, implied volatility is up 3 percent to 33 today (+17 percent on the week), compared to a 52-week high and low of approximately 53 and 21.5.

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McDonald's (MCD) gapped lower and is easily the worst perforrmer in the Dow Jones Industrial Average on disappointing same store sales numbers. MCD is down almost 3 percent to $73.86 after reporting an increase in global same store sales of 4.9 percent in August. Maybe investors were looking for more. Shares are taking a hit. Options volume is 2X the average daily, with 37K contracts traded so far. The top trades were intiated by one investor -- selling the Jan 75 calls at $2.75, 9900X, and buying the Mar 80 calls at $1.58, 7500X. Looks like a roll out a few months and up 5 strikes. Beyond that, most of the action has been in smaller lots. The next biggest trade is 200 Oct 72.5 puts at the $1.18 ask. Implied volatility in MCD is up 5 percent to 20, compared to a 52-week high and low of 30 and 14.

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Adobe Systems (ADBE) shares are up $2.32 to $31.63 after Apple Computer (AAPL) is apparently relaxing its position on the use of Flash applications. In the past, Jobs has said that Flash is basically outdated and has been opposed to the software on iPods, iPads and iPhones. Apparently, Apple is easing these restricitions, which is giving ADBE shares a lift and driving 2X average daily volume in options market. About 8,000 calls and 2,000 puts traded so far. Sep 32 and 33 calls are the most actives. Implied volatility is up about 3 percent to 35.

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MGM adds 67 cents to $10.23 and options volume is running 3X the average daily, with 47,000 calls and 12,000 puts traded so far. The top trade is a buyer of 10,000 January 2012 calls at the 17.5 line at $1.10 per contract at 13:55 on AMEX. Looks like they came back for more and bought another 10K at $1.10. More than 20,000 now traded. Sep 9, 10 and 11 calls are busy as well. Implied volatility in MGM is down 3.5 percent to 54 today after Soleil upgraded the stock to Buy from Hold.

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Bullish flow detected in Micron Technology (MU), with 28216 calls trading, or 2x the recent avg daily call volume in the name. Shares are off 17 cents to $6.58 and top trade is a block of 17,500 April 9 calls at 42 cents on ISE, which is an opening buyer, according to ISEE data. In fact, data shows that 25K calls have been bought to open on the chipmaker so far today. April 9s are most actives, with 25K traded. Implied volatility is up 4 percent to 55. No news on the stock. Shares are down about 42 percent since April 14 and today's call buyers might be anticipating a recovery over the next two quarters.

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JA Solar (JASO) gapped at the open and is up 66 cents to $7.14 after the company announced new supply deals totaling 500 megawatts. Shares touched a new 52-week high and options volume is 2.5X the average daily, with 4,700 calls and 315 puts traded in the Chinese solar cell maker so far. Sep 7.5, Oct 7 and Dec 7 calls are the most actives.

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Corning (GLW) adds 9 cents to $16.90 and the Feb 15 - 19 strangle is bought at $1.82, 3600X on AMEX. Looks like an opening volatility play on the glass maker. Meanwhile, other investors are focused on the Sep 17 puts, with 8,550 traded vs. 5,823 in open interest. The top trade is 2937 at 52 cents on ISE, when bid-ask was 51 to 53 cents. It's not clear if it was buyer or seller initiated, but implied volatility is up 5 percent to 35.

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Oracle (ORCL) is seeing relative strength and increasing options activity on news Mark Hurd, a former H-P CEO, has joined the software maker as President and member of Board of Directors. Goldman also added ORCL to its Conviction Buy List today. Shares are up $1.34 to $24.26 and options volume is running 2X the average daily, with about 44K contracts traded (through 12:30 ET.) Sep 25 calls and Sep 24 puts are the most actives. 27K calls and 17K puts traded total. Implied volatility is up about 8 percent to 34.

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Netflix is up $2.80 to $141.28, a new 52-week high and option activity is 2x the daily average. Some 20,000 calls to 11,000 put have traded. And within that activity the trade is two way and looks to be more about risk reduction as spreads are accounting for the bulk of the volume in what looks like a roll; September $140/$145 calls have traded 3,300 contracts in what looks opening or possibly a roll up in strikes, while the October $145/$150 call spread has 2,100 at each strike in what looks like opening transactions. Also looks like someone is using the weekly options to create a calendar spread of selling the $140 weekly and buying the Sep $145 call for a $2.00 net debit 1,500 times.

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