Stock options give investors a great tool to control risks or speculate on stocks. Call options give investors the right to buy the stock and are typically considered a bullish tool, while puts give investors the right to sell the stock and are typically considered a bearish bet on the future price movement of the stocks. I was interested in seeing what equities have the highest open interest or most outstanding options issued on them looking at all strikes and all months (excluding ETFs).

The top six stocks with most options issued are:

Citigroup (NYSE: C) has an open interest of 5,366,521 options, 2,751,255 are calls and 2,615,266 are puts. The stock has been trending down with the rest of the financials for the last year. Speculation now appears equal with about the same number of calls and puts traded.

Bank of America (NYSE: BAC) has an open interest of 5,204,313 options; 2,575,909 are calls and 2,628,404 are puts. Like Citigroup, this stock has seen its price cut in half over the last year.

General Electric (NYSE: GE) has an open interest of 3,877,635 options; 2,138,926 are calls and 1,738,709 are puts. With 23% more calls than puts outstanding, speculators look slightly bullish on GE.

The big news of the day is that GM was able to reach an agreement with the unions ending the strike; but more importantly using the union to help relieve itself of health care cost. This should be of long term benefit to GM. Overall we saw a day with mild buying in the market.

The NYSE had volume of 3.2 billion shares with 2,144 shares advancing while 1,156 declined for a gain of 46.3 points to close at 9,980.12. On the NASDAQ, 2 billion shares traded, 1,785 advanced and 1,210 declined for a gain of 15.58 to 2,699.03.

General Motors (NYSE: GM) rose 3.22 (9%) to 37.64 on news of the union settlement. Ford Motor (NYSE: F) rose $0.54 (6%) to $8.88 after the GM deal; it should also be able to work something out. Under Armour (NYSE: UA) fell $3.95 (-6%) to $60.10 on a downgrade. Newmont Mining (NYSE: NEM) fell $2.79 (-6%) to $44.90 after warning on thinning reserves. Office Depot (NYSE: ODP) rose $1.03 (5%) to $20.25 on an upgrade.

In options there were 4.6 million puts and 5.7 million calls traded for a put/call open interest ratio of 0.81. The automakers saw some heavy option activity. Given the magnitude of health care costs on the automakers, it is not surprising to see optimistic activity. General Motors (NYSE: GM) saw heavy volume on the October 40 calls (GMJH) with over 53,600 options trading while the October 35 calls (GMJG) with over 29,600 options trading. Ford Motor (NYSE: F) saw heavy volume on the January 5 puts (VFOMA) with over 46,600 options trading. Sallie Mae's deal seems to be falling threw and that likely spured the put activity today. SLM Holding (NYSE: SLM) saw heavy volume on the October 50 calls (SLMJJ) with over 20,400 options trading and the October 40 puts (SLMVH) with over 28,000 options trading.

Kevin Kersten is an Options Analyst with InvestorsObserver.com. Disclosure note: Mr. Kersten is long Office Depot (NYSE: ODP).

Stocks moved mildly lower today taking a break from the bullish buying over the last two days. This is not really a bad sign, after all the S&P 500 gained 3.5% Tuesday and Wednesday so losing 0.67% today still leaves it up 2.8% since the Fed cut. September equity options expire tomorrow so we may see some some extra volatility gong into the end of the week.

The NYSE had volume of 3.0 billion shares with 978 shares advancing while 2,331 declined for a loss of 34.43 points to close at 9,936.47. On the NASDAQ, 1.6 billion shares traded, 1,131 advanced and 1,864 declined for a loss of 12.19 to 2,654.29.

Circuit City Stores (NYSE: CC) dropped $1.90 (-18%) to $8.67 on earnings. Silver Wheaton Corp (NYSE: SLW) rose $0.99 (8%) to $14.02. D R Horton Inc (NYSE: DHI) fell $1.11 (-7%) to $14.08. KB Home (NYSE: KBH) fell $1.95 (-7%) to $27.37. CKE Restaurants Inc (NYSE: CKR) fell $0.99 (-6%) to $15.55 on $.15 earnings per share.

In options there were 5.8 million puts and 7.7 million calls traded for a put/call open interest ratio of 0.75. The most active options lists were almost completely filled with ETF and index options. S&P Depositary Receipts Trust ETF (NYSE: SPY) saw very heavy volume on the September 150 calls (SYHIT) with over 643,800 options trading. The SPY September 149 calls (SFBIS) also had a lot of activity moving 300,400 contracts. Financial Sector SPDR ETF (NYSE: XLF) were again active; the September 33 calls (XLFIG) with over 171,900 options trading. PowerShares QQQ Trust ETF (NASDAQ: QQQQ) saw heavy volume on the March 45 puts (QQQOS) with over 199,800 options trading and the March 48 puts (QQQOV) moved 180,500 options trading.
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Kevin Kersten is an Options Analyst with InvestorsObserver.com. Disclosure note: Mr. Kersten owns and or controls a diversified portfolio of long and short positions that may include holdings in companies he writes about.

Markets made solid gains today moving well in the green. There are a couple of factors that helped lift the market. It is a natural bounce back from the correction; risk of the sub-prime market is coming off the table with the government's attention and intervention, and the summer is ending and we are headed into the fall a time the market typically does better in.

The NYSE had volume of 2.1 billion shares with 2,321 shares advancing while 995 declined for a gain of 101.66 points to close at 9,698.64. On the NASDAQ, 1.6 billion shares traded, 1,969 advanced and 1,065 declined for a gain of 33.88 to 2,630.24.

SILVER STANDARD RESOURCES INC (NASDAQ: SSRI) rose $1.81 (6%) to $31.02. Eastman Kodak (NYSE: EK) gained $1.26 (5%) to $27.93. Apple Inc (NASDAQ: AAPL) moved higher $5.68 (4%) to $144.16.

In options there were 3.5 million puts and 4.5 million calls traded for a put/call ratio of 0.78. There were a couple of options that had heavy volume that cought our attention. BankAmerica Corp. (NYSE: BAC) saw heavy volume on the September 47.50 calls (BACIW) with over 103,000 options trading and the September 45 calls (BACII) moved 90,000 options. BAC pays a dividend, so this may be dividend arbitrage. Apple Computer (NASDAQ: AAPL) saw heavy volume on the September 145 calls (APVII) with over 35,000 options trading. Yahoo! Inc (NASDAQ: YHOO) rose $1.24 (5%) to $23.97. Yahoo (NASDAQ: YHOO) saw heavy volume on the January 30 calls (YHQAF) with over 24,000 options trading and the September 25 calls (YHQIE) moved over 23,000 options trading. Bear Stearns reiterated Yahoo at outperform and tech was strong in general today.

Kevin Kersten is an Options Analyst with InvestorsObserver.com. Disclosure note: Mr. Kersten owns and or controls a diversified portfolio of long and short positions that may include holdings in companies he writes about.

Altria Group (NYSE: MO) is up $1.35 to $70.54 on a report of a spin-off of international operations.

Today, so far Altria Group moved 23,300 contracts on the September 70 calls and traded 4,700 contracts on the September 75 calls. In options there have been 59,605 contracts traded; of them 13,432 contracts are puts while 46,173 contracts are calls. For all options there are 297,119 put contracts open and 820,321 call contracts open. This means that the put/call open interest ratio for MO is 0.36. With so many more calls than puts being traded it also shows that speculators expect the stock to rise.

Call option activity is generally an indicator of bullish speculation on a stock. Call options give the buyer the right to purchase the stock at a set price. Each option contract is represents an interest in 100 shares of the underlying stock. Some of this call option activity may be people expecting a little boost from the spin-off. Altria's stock has moved from around $57 to $72 over the last year and is now trading near the high end of that range.

Looking at key metrics, Altria Group is solidly in line with its competitors in the industry. MO employs 175,000 people and had revenue of 71.22 billion with a gross margin of 46.6% and a net operating margin of 25.4%. British American Tobacco (NYSE: BTI) employs 97,000 people and had revenue of 19.49 billion with a gross margin of 71.65% and a net operating margin of 31.1%. Reynolds American (NYSE: RAI) employs 7,500 people and had revenue of 8.7 billion with a gross margin of 44.42% and a net operating margin of 26.28%. Altria's profit margin is of 17.1% is healthy and it has a high dividend yield is at 3.8%.

Kevin Kersten is an Options Analyst with InvestorsObserver.com. Disclosure note: Mr. Kersten owns and or controls a diversified portfolio of long and short positions that may include holdings in companies he writes about.

Marvell Technology Group (NASDAQ: MRVL) is up $0.72 to $17.69. Marvel Technologies provides microprocessor integrated circuits competing against companies like Texas Instruments (NYSE: TXN). Yesterday in options, there were 84,483 contracts traded; of them 16,170 contracts were puts while 68,313 contracts were calls. For all months and all strikes of puts, there are 154,000 contracts open, while for calls, there are 555,000 contracts open. This means that the put/call open interest ratio for MRVL is 0.28.

Call option activity is generally an indicator of bullish speculation on a stock. Call options give the buyer the right to purchase the stock at a set price. Put options are typically bearish bets and give the buyer the right to sell the stock at a designated price.

Since calls outnumber puts so much, it may indicate expectation that the earnings numbers could be good for Marvell. The two most active call contacts yesterday were right at the money. Marvell Tech. Group moved 46,900 contracts on the September 17.50 calls. Marvell Tech. Group traded 6,500 contracts on the November 17.50 calls.

Some of the most interesting metrics for the company show a high growth in sales, but a low profit margin. The company's operating margin is at 3.5% compared to 16.7% for the industry and its profit margin is at -0.5% compared to 19.6% for the industry. Revenue growth is at 50.6% compared to 14.63% for the industry. The stock has moved from $15.25 to $21.85 over the last year and is now trading in the middle of that range. A look at the fundamentals show some great potential for the stock. The company reports earnings after the close today.

Kevin Kersten is an Options Analyst with InvestorsObserver.com. Disclosure note: Mr. Kersten owns and or controls a diversified portfolio of long and short positions that may include holdings in companies he writes about.