Consumers are finally spending more, with September posting the first gain in more than a year. The International Council of Shopping Centers and Goldman Sachs (NYSE: GS) found that retail sales inched 0.1% higher last month. It doesn't seem like much, but a gain when you anticipate a fall is good news magnified. But, it came at the expense of great deals and other tools to entice somewhat hesitant customers into stores.

Kohl's (NYSE: KSS) and Limited Brands (NYSE: LTD) reported sales increases in September for stores open more than a year. J.C. Penney (NYSE: JCP), Macy's (NYSE: M) and Target (NYSE: TGT) posted declines, but they were better than expected. Delayed school openings thanks to a late Labor Day helped push to September sales that might have occurred in August otherwise.

Of course, all eyes are on the coming holiday season. The National Retail Federation forecasts U.S. consumer spending of $437.6 billion – up only slightly from $433.7 billion four years ago. So, we still have a lot of ground to make up before we can celebrate a recovery. As long as the situation is staying steady, though, we'll at least have a solid starting point.

Office Depot, Inc. (NYSE: ODP) had 1,186 retail stores in North America and another 369 stores owned, licensed or franchised in other parts of the world as of June 30th.

Smith Barney says "shares of ODP appear undervalued but few data points loom in the next quarter or two to drive them higher." ODP is expected to report earnings per share (EPS) in late October. ODP January option implied volatility of 43 is above its 26-week average of 33 according to Track Data, suggesting larger price fluctuations.

Baker Hughes Incorporated (NYSE: BHI) is engaged in the oilfield service sector. BHI recently up $1.01 to $92.12.

BHI has a market cap of $29.5 billion with long term debt of $1 billion. BHI is expected to report EPS on October 26th. BHI reported on October 8th its September rig count rose to 1,032 from 1,009 in August 2007. BHI November 95 calls have traded 59 times on contract volume 2,878 contracts, above its open interest of 834 contracts. BHI November 100 calls have traded 170 times on contract volume 18,641 contracts above its open interest of 480 contracts. BHI November option implied volatility of 34 is near its 26-week average of 30 according to Track Data, suggesting slightly larger risk.

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