Your intraday options trading update.

Rumors have hit the market that RadioShack Corp. (NYSE: RSH) may be the target of Best Buy Corp. (NYSE: BBY), generating a jump in trading volume in the options, according to the OptionAlert service. About 10,000 Radio Shack call options traded this morning, about 14 times the normal average.

Most of the volume is occurring in the RSH Jun 16 calls with more than 5,300 contracts changing hands. In addition, nearly 3,000 calls traded in the RSH Jul 16s and Jul 17s combined. RSH is up .32% to 15.49.

Fort Worth, Texas-based Radio Shack is a seller of consumer electronics in about 4,700 company operated stores in the U.S. and Mexico. It also operates more than 1265 wireless phone kiosks and sells products through 1200 dealers worldwide.

Radio Shack’s market cap is $1.6 billion while Best Buy is valued at $12.22 billion.

BBY was trading at 31.39 this morning, down 1.16%. In an investor and analyst day presentation on April 14, CEO Brian J. Dunn said the Minneapolis-based firm’s strategic priorities were to focus on growth opportunities and improved international returns.

The firm plans to reduce the total square footage at its big box stores by 10% and focus more on smaller stores, such as the Best Buy Mobile standalone stores, according to executives at the event. The firm said that it would add 150 of the Mobile stores in fiscal 2012 with a goal of 600 to 800 in five years.

 

High Options Volume by Strike

Williams Co. (NYSE: WMB) sees major action in its WMB Aug 35 Call and Aug 30 call, each trading more than 45,000 contracts. WMB is up 1.8% to 31.22. The 35s last is .56 while the 30s were at 2.38.

The SPDR S&P 500 ETF (NYSE: SPY) sees activity in its Weekly May 133 Call, trading 37,000 options with a last at .34. The Weekly 132 Put also busy with about 32,000 contracts trading. SPY trading up .39 to 132.34.

Other active equities include Bank of America (NYSE: BAC) as the BAC Jul 12 Call trades 36,505 contracts, down .02 to .24. BAC was down to 11.44. The Yahoo (NASDAQ: YHOO) Weekly 17 Call trades down .07 to .06 on 27,800 contracts. YHOO was up .12 to 16.26.

Major Stock Trading Volume Movers

California Pizza Kitchen (NASDAQ: CPKI) is up 1.65 to 18.36 on more than 22 million shares, 15 times the usual stock volume. Golden Gate Capital will pay $470 million, or 18.50 per share, to buy CPKI.

American International (NYSE: AIG) trades 113 million shares, down 1.4 to 28.06. AIG returned yesterday, selling 300 million shares at $29 a share to raise $8.7 billion. Money went to reduce U.S. government stake in insurer.

Martha Stewart Living (NYSE: MSO) is up 1 to 4.77 on 4.8 million shares. MSO reports it hired Blackstone Advisory partners to review and respond to several firms that have sought to partner or invest in the company.

Find more option analysis and trading ideas at Options Trading Strategies.

Stocks/Underlying – Big Daily Change in Option Volume

Temple Inland (NYSE: TIN) sees 13,000 options change hands as it rises .09 to 22.69. OptionMONSTER reports a call spread of a total of about 12,800 contracts in the TIN Jan 25 calls and Jan 30 calls.

Navistar Intl (NYSE: NAV) trades about 11,500 options as it rises .78 to 65.02. That’s 15 times the usual options trading volume.

Polo Ralph Lauren (NYSE: RL) trades about 13,400 options, a 340% rise. RL is slammed down 10.90 to 118.49 after it reports fiscal 2011 revenues of $5.7 billion, down from analyst expectations of $6.7 billion.

Stocks/Underlying – High Option Volume

The SPDR S&P 500 (NYSE: SPY) has option volume of about 550,000 contracts as it moves higher. The Standard & Poor’s Index Options (CBOE: SPX) trades more than 221,000 options as it rises 3.87 to 1320.15.

The iShares Silver Trust (NYSE: SLV) trades more than 228,000 options as it continues rising .99 to 36.76.

The CBOE Volatility Index (CBOE: VIX) is down .53 to 17.29 with 79,000 options trading against the Fear Gauge.

The iShares Russell 2000 Index ETF (NYSE: IWM) trades 104,000 options as it rises .90 to 81.88.

WMB trades 93,499 options.

 

Burney Simpson is the managing editor of InvestorPlace options pages.