GE - General Electric - It can't have escaped your attention that today's broad market pick-up doesn't extend to shares of General Electric, which is underperforming with a fresh 10% slide to $6.30. Options on the stock yesterday captivated investors - attention with volume at the June 2.50 put grabbing the headlines. Today options volume during the morning is easily beyond that of the SPDR Trust Series on the S&P 500 index at 780,000 lots. Activity is desperately bearish with scant signs of optimism. Volatility in options is once again on the rise at 161% from 140% on Tuesday. Volume of 71,000 lots at the March 2.5 strike suggests that put buyers expect further downside pressure on the share price although we'd note that the prevailing 6 cent premium makes this a cheap play. The volume represents twice the number of established positions at the strike. Similar volume was seen at the April 5.0 and June 2.5 strikes. Of note today is the fact that despite the breach of Tuesday's $6.60 low the premium commanded by those June puts, which traded so heavily yesterday still leaves that buyer at a current mark-to-market loss of around four cents per contract. On a more optimistic note, sizeable call purchases summing to around 21,000 lots was seen at the September 12 strike where the premium suggests a rebound for shares to $12.50 ahead of the onset of Autumn.

JPM - JPMorgan Chase & Co. - A buyer of upside risk emerged today in the January expiration call options at JPM, one day after the company noted just how swell revenues are in the first quarter. With shares down 2.3% at $20.52 the investor set his sights on the 27.5 strike where at least 34,000 lots were bought at a premium of 3.70. The current odds of these calls landing in the money stand at 46% according to delta, a measure of the options sensitivity to a change in the price of the underlying. That could change, however, given the current reading of 104% implied volatility, which is boosting option premium. Shares would need to rise to $31.20 using an expiration-based outlook, but that's not necessarily as long as this investor might expect to hold calls for if the stock can rebound sharply.

CAT - Caterpillar, Inc. Thanks to a rally that is likely inspired by optimism surrounding the infrastructure led stimulus package from China, shares have jumped 16% to $26.24,. Contrary to the tone reflected by today's rising tide, one option trader established a bearish play in the August contract. The investor implemented a put spread by purchasing 4,000 puts at the August 17.5 strike price for 1.51 each, and selling 4,000 puts at the August 12.5 strike for 47 cents per contract. The net cost of the trade amounts to 1.04, and yields a maximum profit of 3.96 should shares decline all the way to $12.50 by expiration. Profits will begin to amass for this investor if shares of CAT fall below the breakeven point of $16.46. This view played out using options reminds us of the - once bitten, twice shy - expression. In this case the investor appears tired of continued short-lived gains inspired by stimulus plans that tend to be outweighed by a broken heart to the financial system and a feeling that we have not yet seen the worst of this recession.

FCX - Freeport-McMoran Copper & Gold, Inc. - Similar to other mining companies today, FCX has seen its shares rise 14% to stand at $32.39. In contrast to the contrarian option plays observed in CAT, investors established bullish positions in Freeport-McMoran. At the March 35 strike price, 4,000 calls were purchased for 1.14 each, while at the April 35 strike price, nearly 6,000 calls were scooped up for 2.32 per contract. If shares can continue to climb higher this month the March calls will breakeven at a share price of $36.14, an increase of 11% from today's price. As for the April calls, the breakeven is a bit higher at $37.32 and would require a 15% increase from the current price. Maybe investors see optimism in FCX as more realistic because of its greater involvement in commodities markets. FCX is literally closer to the ground than companies like CAT who provide machinery to get break ground.