Quick Indicators:

Bullish flow detected in Advanced Micro Devices (NYSE: AMD), with 20,112 calls trading, or three times the recent average daily call volume.

Bearish activity detected in Advanced Auto Parts (NYSE: AAP), with 2,003 puts trading, or six times the recent average daily put volume.

Bearish activity detected in Skechers USA (NYSE: SKX), with 5,689 puts trading, or three times the recent average daily put volume.

Increasing volume is also being seen in Petroleo Brasileiro, or Petrobras (NYSE: PBR), General Motors (NYSE: GM), and the U.S. Oil Fund (NYSE: USO).

Markets

Stocks are trading mixed late Tuesday. The table was set for morning gains on Wall Street after Japan’s Nikkei gained 1.7% and UK’s FTSE jumped 1.9%. Gains overseas set a positive tone for morning trading including a report on factory orders showing an up tick of .7% for November. Economists were looking for a drop of .3%. Yet, the major averages didn’t react to the data and, instead, had fallen into the red by midday. Minutes from the latest Fed meeting came into focus Tuesday afternoon, but didn’t hold any surprises so easy policy action is set to continue.

With an hour to go in trading the major averages are now off session lows and the Dow Jones Industrial Average is up 5 points. The tech-heavy NASDAQ lost 13. The CBOE Volatility Index (VIX) made a stab above 18, but is now up .05 to 17.66. Options volume is respectable, with 9.2 million calls and 5.8 million puts traded so far.

Bullish Flow

Motorola Solutions (NYSE: MSI) options are active on their first day of trading. MSI is one of two publicly traded companies that emerged from Motorola’s spin-off into different units. Motorola Mobility (NYSE: MMI) includes smart phone and set-up boxes. MMI is up $1.53 to $32.95. Motorola Solutions consists of bar code scanners and two-way radios. MSI is up 7 cents to $37.55. Meanwhile, Motorola Inc. (NYSE: MOT) options have been adjusted and MOT Jan 9 Calls are the most active, with volume of 5,325. For MOT, 10,000 calls and 1,000 puts now traded. (Settlement calculated on .14 X MSI + .12 X MMI + a bit of cash).

Disney (NYSE: DIS) notches a 52-week high and is one of 17 Dow stocks moving higher through midday. Shares are up 69 cents to $38.51 and 12,000 calls have traded on the media giant. The activity represents 12 times the typical activity and compares to put volume of 2,545 contracts. The top trade is a block of 2,572 DIS Jan 38 Calls at 86 cents on the International Securities Exchange and an opening customer buyer, according to ISE data. For the DIS Jan 38 Calls, a total of 3,983 traded. Another 3,824 DIS Jan 39 Calls changed hands. No news on the stock today and the action seems to reflect expectations for additional gains in Disney shares over the next two and a half weeks. January options expire in 17 days.

Bearish Flow

Las Vegas Sands Corp. (NYSE: LVS) adds $1.72 to $47.31 and is running to session highs after a block of 4.17 million shares recently traded at $46.89. Most of the options action was earlier in the day and included a LVS March 45 Call, LVS March 47 Call spread sold at 97 cents and $1. Open interest in both contracts is more than 57,000. The same spread was bought in early November at $1.15.

Implied Volatility Mover

Going into the last hour of trading, the Materials Select Sector SPDR Fund (NYSE: XLB) was losing 50 cents to $38.22 and options volume is three times the average daily, with 21,000 puts and 8,425 calls traded. The top trade is a XLB June 34 – June 41 strangle sold at $2.76 for 3,000 contracts. Today’s trades also includes a sweep of 1,810 XLB June 34 Puts on the $1.35 bid and 1,378 XLB June 38 Puts on the $2.76 bid, which look like opening premium sales. Implied volatility (IV) is up 9% to 25 despite today’s selling in XLB options, as shares slump on a rough day for the material sector.

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.