Note: The Daily Option Update is provided by Stock Options Specialist Paul Foster of theflyonthewall.com.

Volatility Index S&P 500 Options-VIX is up .75 to 16.17.

Alcan Aluminum Inc-(NYSE:AL) option implied volatility and volume spikes on M&A report. AL is recently up $1.87 to $53.86 on an M&A report from Estado de S. Paulo. AL is a global materials company with 65,000 employees in 59 countries generating revenues of $23.6 billion in 2006. AL has a market cap of $19.2 billion with long-term debt of $5.4 billion. AL March option implied volatility of 56 and April at 38 is above its 26-week average of 35 according to Track Data, suggesting larger price fluctuations.

Alcoa Inc-(NYSE:AA) March option implied volatility elevated suggesting more Risk. AA, the world's biggest aluminum processor, has a market cap of $29.34 billion. AA is recently up .37 to $33.78. AA is frequently mentioned as an M&A target. LME Aluminum HG is down 2.35% to 2829.00 according to Bloomberg. AA March option implied volatility of 36 is above its 26-week average of 29 according to Track Data, suggesting larger price fluctuations.

BHP Billiton Ltd-(NYSE:BHP) March option implied volatility suggests Flat Risk. BHP, the world's largest mining company, has a market cap of $125 billion, is recently down .43 to $42.50. BHP has been frequently mentioned during the last 52-weeks as having an interest in doing a deal with FCX, AL & AA. BHP overall option implied volatility of 31 is near its 26-week average according to Track Data, suggesting non-directional price fluctuations.

Option volume leaders today were: Amgen (NASDAQ:AMGN), Goldman Sachs (NYSE:GS), Intel (NASDAQ:INTC) and Apple Computer (NASDAQ:AAPL).