This article is by Frederic Ruffy, Senior Options Strategist at Whatstrading.com.

Bearish activity detected in Red Hat (NYSE: RHT), with 2984 puts trading, or three times its recent average daily put volume.

Bullish flow detected in Emulex (NYSE: ELX), with 5568 calls trading, or four times its recent average daily call volume.

Bearish activity detected in Juniper Networks (NYSE: JNPR), with 9534 puts trading, or three times its recent average daily put volume.

Increasing volume is also being seen in MannKind (NASDAQ: MNKD), Freeport- McMoRan (NYSE: FCX), and the iShares Russell 2000 Index (NYSE: IWM).

Sentiment

One hour before the market close, major averages are sporting modest losses, but are well off session lows heading into the final hour of trading Thursday. A barrage of economic data was in focus early. Weekly jobless claims for Jan. 15, 2011, declined by 37,000 to 404,000. Economists were looking for a drop to 425,000. Existing Homes Sales improved to 5.28 million in December, from 4.7 million in November and ahead of expectations (of 4.8 million). The List of Leading Economic Indicators rose 1% last month and .4% more than expected. The Philly Fed manufacturing survey was the only disappointment, falling to 19.3 in January (vs. 20.0 estimates). Meanwhile, the tech sector is being weighed down by losses in the cloud/networking space after F5 Networks (NASDAQ: FFIV) missed on earnings. Commodity-related names are broadly lower along with metals and energies (except natural gas). Bonds fall and the yield on the ten-year recaptured 3.45%. However, gains in the retailers, including Dow components Home Depot (NYSE: HD) and Walmart (NYSE: WMT), are helping. Bank of America (NYSE: BAC) is also higher ahead of earnings, Friday morning. Dow component General Electric (NYSE: GE) is slated to report on options-expiration Friday as well. The Dow Jones Industrial Average is down 10 points. The tech-heavy NASDAQ lost 19. The CBOE Volatility Index (.VIX) added .55 to 17.86. Trading is active due to the upcoming expiration, with 10.6 million calls and 9.2 million puts traded so far.

Bullish Flow

66,000 calls and 33,000 puts traded in Visa (NYSE: V). Shares, which traded as low as $67.51 early, rallied in the second half of day and are up $2.16 to $71.28. The run higher is apparently related to developments in debit card interchange rate regulation. In options action, players are trying to swipe short-term profits in the V Jan 70 and 75 Calls, which have traded 15,600 and 10,700, respectively. V Feb 65 Puts, 67.5 Puts and 75 Calls are seeing increasing action as well. Implied volatility (IV) in Visa is up 10% to 32. Earnings slated for Feb 2 (after market).

Bearish Flow

It looks like some investors are taking out some disaster insurance in Yingli Green Energy (NYSE: YGE). Shares are off 13 cents to $11.22 and the focus is on the YGE June 6 Puts, which have traded 4600 times. The top trade is 500 at 15 cents on the International Stock Exchange (ISE) and an opening buyer. 4,200 puts total, or 98% of the volume in YGE on the ISE, are opening buyers. Implied volatility is up 4.5% to 47.5. No news on the stock. Next earnings due early-March.

Williams Companies (NYSE: WMB) loses 6 cents to $25.97 and showing some resilience after natural gas prices rose 9 cents to $4.65 on the heels of today’s weekly inventory data. In options action, a noteworthy trade is a buyer of 30,000 WMB Feb 28 Calls at $40 cents each. The position is tied to shares $25.96 (26 delta). It might be offsetting, as open interest is 70,800. Today’s trading also includes a seller of 4,500 WMB Jan 21 Calls at $5.03 and probably a closing trade ahead of the expiration. Another interesting spread is a seller of WMB Feb 22 Puts at 40 cents for a Feb 25 synthetic, 5000 times.

Implied Volatility Mover

The PowerShares QQQ Trust (NASDAQ: QQQQ) lose 38 cents to $56.13 and QQQQ Feb 56 Puts are the most actives early Thursday. The volume includes a buyer of 38,000 contracts at $1.04 per each. 54,760 now traded versus 90,707 in existing open interest. After notching a new 52-week high Tuesday, the tech-heavy QQQQ is down 1.8% during the past two days, weighed down by mixed earnings news and profit-taking. Shares of the exchange-traded fund are up 9.3% since mid-November. Meanwhile, implied volatility in the Qs, as measured by the QQQ Volatility Index is .64 to 16.91.

This article is by Frederic Ruffy, the Senior Options Strategist at Whatstrading.com, a site dedicated to helping traders make sense of the complex and fragmented nature of listed options trading.