This morning, Goldman Sachs felt it prudent to up its view of the U.S. auto sector to Attractive from Neutral. The brokerage stated that it would use any current weakness as an opportunity to build positions. If, like me, you are questioning Goldman's strategy, the firm explained, "Despite the significant rally in auto shares since the February lows, we think we are still in the middle phase of a cyclical rebound in the auto sector."

In its note to clients, Goldman Sachs predicted, "improved affordability, improving confidence and significant pent-up demand as likely to offset the impact from gas prices and deliver significantly more upside in the space as auto sales gain momentum."

First Solar (NASDAQ: FSLR) implied volatility elevated as FSLR rallies 14%.

• FSLR, a manufacturer of solar modules with an advanced thin semiconductor process that significantly lowers solar electricity costs, is recently up $15.20 to $111.57.
  
• FSLR announced five new customer agreements for a total of $1.3 billion.
  
• Cowen reiterated its Outperform rating on FSLR. Banc of America reiterated its Buy rating and raised its price target to $115.
  
• FSLR August option implied volatility of 66 is above its 21-week average of 52 according to Track Data, suggesting larger price risks.

Gamestop (NYSE: GME) calls active as GME rallies on unconfirmed takeover speculation.

• GME, a video game and entertainment software retailer, is recently up $0.80 to $42.35.
  
• Unconfirmed chatter is circulating that Amazon.com, Inc. (NASDAQ: AMZN) is looking into buying GME.
  
• GME call option volume of 4,846 contracts compares to put volume of 783 contracts. GME August option implied volatility of 43 is above its 26-week average of 36 according to Track Data, suggesting larger price risk.

Option volume leaders today are: ArvinMeritor, Inc. (NYSE: ARM), Apple Inc. (NASDAQ: AAPL) and Baidu.com, Inc. (NASDAQ: BIDU).

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