Daily Options Update: MO is option volume leader, MSFT volatility is low

U.S. stocks were mixed today as traders and investors reacted to the Federal Open Market Committee deciding to leave rates unchanged at 5.25%. The S&P 500 was up .23%, NASDAQ 100 rallied .77% and 10-year bond rates declined to 4.84%. The CBOE VIX sold off .12 to 10.66.

Altria (MO) was the option volume leader after reporting solid EPS and the announcement MO will make finalized KFT spin off details on 1/31/07. MO traded 312,239 calls & 126,366 puts. Option implied volatility decreased on the expectations of less share price movement risk.

Amazon (AMZN) rallied 12% on a positive EPS surprise, AMZN option were on the most active list with AMZN implied volatility declining to 30 from a level of 58 yesterday.

Microsoft Corporation (NASDAQ:MSFT) options were active into 10/26 EPS report. Call volume was heavy on 63,046 contracts & 38,977 puts. MSFT November option implied volatility of 18 is at the low end of its 26-week range, suggesting low risk.

Sprint-Nextel (S) is expected to report EPS of .33 cents on 10/26. S call volume was heavy on 93,767 calls with put volume of 149,048. S option implied volatility is elevated at 45, suggesting increased risk.

Options Update is provided by Paul Foster and TheFlyOnTheWall.com (subscription required)