UST (NYSE: UST) is recently trading at $62.80 in pre-open trading, above its close of $54. Altria Group (NYSE: MO) is close to acquiring UST in a deal worth more than $10 billion, the New York Times reported. UST September option implied volatility is at 39; October is at 35 above its 26-week average of 27 according to Track Data, suggesting larger price movement.

ScanDisk (NASDAQ: SNDK) is recently trading at $17.49 in pre-open trading, above its close of $13.46. Samsung Electronics said it is looking at various ways of tying up with SNDK. SNDK, a supplier of flash storage cards says "SNDK periodically has conversations with multiple parties, including Samsung, regarding a variety of potential business opportunities. We evaluate all of these opportunities, but maintain a policy of not commenting on market rumors or speculation," SNDK September option implied volatility of 64 is above its 26-week average of 59 according to Track Data, suggesting larger price movements.

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

Volatility Index S&P 500 Options-VIX up 0.24 to 13.53

Advanced Micro Devices Inc. (NYSE:AMD) calls (quoted in Pennies) busy on chatter of private equity cash infusion. AMD is recently up $0.46 to $13.87. AMD has been frequently subject to LBO chatter; today chatter is circulating that a friendly private equity-strategic partner could surface to make cash infusion. Speculation is that AMD could announce a deal similar to the deal Sun Microsystems Inc. (NASDAQ:SUNW) announced on 1/23/07, when it received a $700 million dollar private placement from KKR. AMD call option volume of 73,560 contracts compares to put volume of 9,747 contracts. AMD April option implied volatility of 41 is below its 26-week average of 45 according to Track Data, suggesting decreasing price risks.

eBay Inc. (NASDAQ:EBAY) implied volatility is low. Meg Whitman enters ninth-year working as eBay CEO. EBAY is recently up $0.23 to $31.72. Meg Whitman has an estimated net worth of $1.2 billion according to Forbes, much of it in EBAY stock. Years ago, Whitman said she would leave EBAY after eight to ten years. Whitman joined EBAY in 1998. EBAY has a market cap of $43 billion. Microsoft Corp. (NASDAQ:MSFT) has a market cap of $270 billion. EBAY overall option implied volatility of 34 is below its 26-week average of 37 according to Track Data, indicating decreasing risks.

Option volume leaders today are: SanDisk Corp. (NASDAQ:SNDK), AtheroGenics Inc. (NASDAQ:AGIX), Halliburton Co. (NYSE:HAL) and Qualcomm Inc. (NASDAQ:QCOM).

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