Your daily options trading wrap up.

Sentiment

Trading has been choppy Thursday afternoon and the Dow Jones Industrial Average is now up 12 points — 122 points off its worse levels of the day. The tech-heavy NASDAQ is down 3 points ahead of earnings from Google (NASDAQ: GOOG). The CBOE Volatility Index (CBOE: VIX) lost .59 to 16.33 and probing multi-week lows. Options are actively traded due to the expiration, with 7.4 million calls and 6.8 million puts traded so far.

Bullish Flow

The top equity options trades so far today are in Microsoft (NASDAQ: MSFT), which is trading down 33 cents to $25.30. One investor bought 108,000 MSFT July 27 Calls at 44 cents and sold 71,000 MSFT October 26 Calls at $1.24. The action likely rolls a position opened in mid-January, when the Jul11 27 calls were sold-to-open and Jan11 25 calls were bought-to-close. A Microsoft shareholder might be initiating these spreads as part of buy-write strategy.

Cisco Systems (NASDAQ: CSCO) loses 11 cents to $17.14 and it looks like one investor sells CSCO Jun 16 Puts to buy the CSCO Jun 18 – 20 Call Spread, paying a penny on the three-way, 15,000 times on International Securities Exchange. Sentiment data is consistent with buying the call spread, selling puts. Cisco shares rallied 4.9% on April 6, the day after the company’s CEO vowed major changes in the organization of the networking giant. However, shares have lost ground in the six subsequent trading sessions and have now erased the entire gain. Today’s spread trader might be looking for a rebound through mid-June.

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Bearish Flow

Yongye International (NASDAQ: YONG) loses 34 cents to $4.60 and 2,700 puts traded in the Chinese ag chemical maker. YONG May 4 Puts are the most actives with 960 traded (93% on the ask). Similar action in April 5, May 6 and July 4 puts. Shares hit 52-week highs of $9.49 in early-November, but have been trending lower since that time and hit a new 52-week low of $4.43 on Friday. Today’s order flow seems to reflect concerns about additional losses in the weeks ahead.

Implied Volatility Mover

CBOE Volatility Index (CBOE: VIX) loses .10 to 16.82 despite disappointing claims data and choppy market action Thursday morning. S&P 500 fell early and is down 3.9 points after the Labor Department said filings for jobless benefits increased by 27,000 to 412,000 last week. Economists were looking for 385,000. Trading has been orderly, however, and VIX edged lower despite weakness in the broader market. The options expiration might be affecting the action, as today is the last day to trade S&P 500 Index Options (CBOE: SPX) SPX April options. Meanwhile, a noteworthy recent trade in the VIX is a VIX May 21 – 25 (1X2) Call Ratio Spread at 20 cents, 15,000 times. Looks like a debit was paid to sell the 21 calls and buy twice as many 25s. It might be closing.

Options Flow

Bearish activity detected in Tellabs (NASDAQ: TLAB), with 6779 puts trading, or four times its recent average daily put volume.

Bullish flow detected in KKR & Co. (NYSE: KKR), with 5282 calls trading, or nine times its recent average daily call volume.

Bullish flow detected in CDC Corp. (NASDAQ: CHINA), with 3544 calls trading, or 177 times its recent average daily call volume.

Increasing volume is also being seen in Tyco (NYSE: TYC), Goldman Sachs (NYSE: GS), and Supervalu (NYSE: SVU).

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.