Your daily options trading wrap up.

Sentiment

Silver is seeing notable weakness today, down $5.20 to $40.87 an ounce. Gold lost $28.1 to $1,529 an ounce and crude oil is off $2.73 to $110.69 a barrel. The volatility in the metals and crude comes amid a modest rebound in the dollar index (DXY), which was recently up .23 to 73.12 and near its best levels of the day. Today’s economic calendar included a report on March Factory Orders, which improved by 3% versus a 1.8% consensus estimate. The tone of trading is cautious. Looming jobs data is one factor. ADP gives a peek at the April jobs situation tomorrow. The Labor Department releases its key jobs report Friday. Bonds are flat today ahead of the news, but the CBOE Volatility Index (CBOE: VIX) is up 1.24 to 17.23 and near session highs. Trading in the options market is busy and somewhat distorted due to heavy ex-dividend trading. 13.5 million calls and 7.6 million puts traded so far.

Bullish Flow

Sirius XM Radio (NASDAQ: SIRI) touched a new 52-week high and is up 15 cents to $2.06 after the company reported a one-cent per share quarterly profit, which was in-line with Street estimates. SIRI options are seeing heavy trading as well. 71,000 calls and 11,000 puts traded on the satellite radio company so far. May, June, and January 2 calls, which are five cents in-the-money, are the most active. The action seems to include a mix of buyers and sellers. Some investors might be taking position in anticipation of additional gains in the share price. Others might be unwinding bullish plays after a 116% rally in the stock since August. Jun 1.5 and 2.5 calls are seeing active trading as well. SIRI May 2 Put is the most active on that side. Implied volatility has eased 10.5% to 43, compared to a 52-week high and low of 85 and 34.5.

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Bearish Flow

Silver Wheaton (NYSE: SLW), a Vancouver-based miner, is trading down 2.7% to $36.75 after silver (July) lost $2.38 to $43.70 Tuesday morning. 18,000 calls and 5,800 puts have traded in SLW. Some investors might be liquidating positions. For example, the SLW Jan 40 Calls are the most actives with 4,640 traded; 77% of the volume has been on the bid. Open interest is 13,283 contracts. May 42, May 44, Jun 42 and Jan 45 calls are seeing interest as well. The increased volume comes ahead of earnings, May 9, before the open.

Big Prints in Citigroup (NYSE: C) after an investor sold the C Sep 4.5 – 5 Call Spread at 18 cents to buy C Sep 4 Puts at a dime, 49,000 times. It might close positions opened in mid-March when the same three-way was trading for about even money. Shares are up 4 cents to $4.53 today and 3.4% since the spreads were initiated. It appears that this investor is closing the position out now, rather than attempting to make additional money to the upside. The potential pay-out from the three-legged spread is 50 cents if shares rally to $5. They’re collecting an 8-cent profit instead.

Implied Volatility Mover

VIX is up .41 to 16.40 and moving higher for a third day. VIX gained 1.24 points yesterday, as it seems that any positive reaction from news that Bin Laden was killed was quickly replaced by concerns for potential retaliatory attacks. Friday’s payroll report now looms. Overbought market conditions, some falling commodities prices, and lackluster earnings have conspired to send stocks lower today. Market breadth is poor. 305 S&P 500 stocks are moving lower and 190 are in positive territory. VIX, which tracks the expected volatility priced into S&P 500 options, is now up 14.8% from the lows seen Thursday.

Option Flow

IShares Silver Fund (NYSE: SLV) options volume is running two times its average daily, with 1.4 million contracts and call volume accounting for 51%  of the activity.

Basic Materials Select Sector Fund (NYSE: XLB) is seeing five times its average daily, with 109,000 contracts and put volume representing 94% of the activity.

IShares Long-term Bond Fund (NYSE: TLT) is seeing two times its average daily volume, with 88,000 contracts and call volume representing 86% of the activity.

Increasing volume is also being seen in Mosaic (NYSE: MOS), Schlumberger (NYSE: SLB), and Alpha Natural Resources (NYSE: ANR).

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.