Your daily options trading wrap up.

Sentiment

Stocks are trading mixed in uninspired market action Monday. With no earnings or economic data to guide investors, volume is light and trading has a wait-and-see feel. Oil prices are getting some attention after crude moved up 57 cents to $108.50 per barrel.  Meanwhile, investors are waiting the first round of corporate earnings report. Dow component Alcoa (NYSE: AA) kicks things off one week from today. This week’s economic calendar is also light. ISM Services Index and Fed minutes are out tomorrow. There’s not much data beyond that. So, it might be a slow week. Trading is very quiet to so far. The Dow Jones Industrial Average has traded in a 38-point range and is up 4 points in the final hour. The tech-heavy NASDAQ lost 8.8. The CBOE Volatility Index (CBOE: VIX) added .42 to 17.82. Volume is running only 65% the recent average daily, with 5.3 million calls and 4.5 million puts traded so far.

Bullish Flow

Clean Energy Fuels (NASDAQ: CLNE) shares are up $1.15 to $17.47 and extending a recent rally on signs of improved government support for natural gas. President Obama said last week that he believes that the commodity has “enormous” potential as an alternative to oil and also said that natural gas vehicles are one subject of bi-partisan agreement. CLNE is now up 35.2% since March 17. Options volume is 9,380 calls and 2,060 puts so far today. It seems that some investors are looking for the rally to continue this week and next, as April 17 and 18 calls are the most actives, with 1337 and 1889 traded, respectively, and about two thirds-traded at the Ask. CLNE Jun 20 Calls are the third most actives, with 1247 changed hands (88% on the Ask).

Bank of America (NYSE: BAC) adds 10 cents to $13.47 and upside call buyers are showing interest in the May and Jun 14s Monday morning. The top trade is a 19,000-contract block of BAC May 14 Calls at 36 cents on International Securities Exchange, which is an opening customer buyer, according to ISEE data. 42,720 now traded. BAC June 14 Calls, which have traded 10,130 contracts, have traded 97% on the Ask. April 14, April 15, and May 13 calls are seeing interest as well. 80,000 calls and 9,500 puts traded in the name, which is about 50% of the total volume in the financial (fin1) so far today. BofA shares fell 1.7% on March 23 after the Federal Reserve rejected the bank’s plan to raise dividends. BofA is expected to submit a new plan for approval. Earnings are slated for April 15 (before market).

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Bearish Flow

Put volume picked up in Southwest Airlines (NYSE: LUV), with 5,130 contracts traded, or six times the average daily put volume for the airliner. Shares are down 39 cents to $12.28 after Southwest canceled 50 flights to inspect fuselage cracks in a fleet of 737s. The options action has been in smaller sizes. The top trade is a 250-lot of the LUV April 12 Puts at the 25-cent asking price. 2,900 contracts now traded. April 11 and 13 puts, which expire in 11 days, are the next most actives.

Implied Volatility Mover

Duoyuan Global Water (NYSE: DGW), a Chinese water treatment company, is down 69 cents to $4.80 and touching new 52-week lows today. 6,000 puts and 2,140 calls traded in the name so far, which is about four times its average daily volume. The top trade is a 250-lot of DGW May 5 Calls at 65 cents when the market was 65 cents to $1. Looks like an opening seller. The next biggest trade is a 211-lot of the DGW April 5 Puts at the 95-cent ask price. 2,237 traded. April 2.5 puts are the next most actives. 1,600 traded. Implied volatility is up 19.5% to 195.5. Shares fell 11.7% on March 23 after earnings were reported and are down another 34.3% since that time. Today’s options flow seems to reflect concerns about additional losses in DGW in the days/weeks ahead.

Option Flow

Bearish activity detected in LSI Corp. (NYSE: LSI), with 20,928 puts trading, or 20 times its recent average daily put volume.

Bearish activity detected in MBIA (NYSE: MBI), with 7028 puts trading, or four times its recent average daily put volume.

Bullish flow detected in Louisiana-Pacific (NYSE: LPX), with 2441 calls trading, or three times its recent average daily call volume.

Increasing volume is also being seen in Juniper Networks (NYSE: JNPR), NetApp (NASDAQ: NTAP), and Monsanto (NYSE: MON).

Frederic Ruffy is 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.