Apple Inc. (NASDAQ: AAPL) -- May OTM puts more expensive than calls, suggesting downside Hedging. AAPL is expected to report EPS of 64 cents after the close tonight. AAPL call option volume of 56,543 contracts compares to put volume of 25,270 contracts. AAPL May 105 calls have traded 172 times on transaction volume 20,030 contracts. AAPL May 85 puts have traded 133 times on transaction volume of 8,659 contracts according to Track Data. AAPL May 85 puts are bid 55 cents, above its theoretical value of 42 cents. AAPL May 105 calls are bid 45 cents, below its theoretical value of 49 cents. AAPL options suggest downside hedging tendencies.

Navistar Intl. (NASDAQ: NAVZ) -- elevated implied volatility suggests Risk as NAVZ at record High. NAVZ, a truck, bus, engine manufacturer, is recently up $1.13 to $57.93. MAN AG, Hino, F, Fiat, Isuzu, PCAR, OSK, General Motors (NYSE: GM), DaimlerChrysler (NYSE: DCX) and Iveco have been frequently mentioned as interested in doing acquisitions, partnerships or bolt-on deals. NAVZ over all option implied volatility of 46 is above its 26-week average of 41 according to Track Data, suggesting larger price risks.

Option volume leaders today are: Intel Corp. (NASDAQ: INTC) and Apple Inc. (NASDAQ: AAPL).

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

Nothing seems to be off-limits in the auto industry. There is a report from the Automotive News, which indicates that General Motors Corp. (NYSE: GM) and Ford Motor (NYSE: F) talked about some type of alliance. There is also the idea of a three-way alliance with GM, Renault SA and Nissan.

Well now there is some hostile activity in the auto sector. MAN AG, a Germany manufacturer of commercial vehicles, has made a $12.15 billion offer for Scania AB, a truck manufacturer in Sweden.

The combination would have a lot of heft, with 18.5 billion Euros in sales and operating profits of 1.4 billion. There is also likely to be lots of cost synergies. Something else: the two companies are fairly complementary. That is, MAN's strength is on trucks for short runs, whereas Scania is focused on long-journey trucks.

The new entity should also put more pressure on rivals, such as DaimlerChrysler and Volvo AB.

But the price was not enough to interest Scania, as its board rejected the offer. The two biggest shareholders include Volkswagen AG (34% stake) and Investor (29% stake), which is run by the Wallenberg family (one of the richest clans in Sweden).

Yes, this is old-fashioned negotiation at work. So expect the price to go north on this deal.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.