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.

MOST NOTEWORTHY: The U.S. media sector, oil services, MercadoLibre and Horsehead Holdings were today's noteworthy initiations:

• Credit Suisse initiated coverage of the U.S. media sector with a Market Weight rating, shares of The Walt Disney Company (NYSE: DIS) with an Outperform rating and shares of Time Warner Inc (NYSE: TWX) and Viacom Inc (NYSE: VIA.B) with Neutral ratings.
  
• Bernstein initiated coverage of the oil services sector with a Positive Bias rating. The firm initiated Weatherford International Ltd (NYSE: WFT) with an Outperform rating and $84 target and Halliburton Company (NYSE: HAL), Baker Hughes Incorporated (NYSE: BHI) and Schlumberger Limited (NYSE: SLB) with Market Perform ratings and a $44 target, $103 target and $96 target, respectively.
  
• MercadoLibre Inc (NASDAQ: MELI) was initiated by American Technology with a Buy rating and $45 target, as the firm believes the e-commerce growth opportunity in Latin America is still in its infancy. Shares were also started at Pacific Crest with an Outperform rating and $37 target, as the firm believes the company should benefit from strong secular growth and company-specific drivers. MercadoLibre was also initiated at JP Morgan with an Overweight rating and at Merrill Lynch with a Buy rating and $35 target.
  
• Friedman Billings expects Horsehead Holding Corp's (NASDAQ: ZINC) EBITDA to increase even in a declining commodity environment and believes the company is well positioned to gain market share. Shares were started with an Outperform rating and $27 target also added to the firm's Top Pick List.

OTHER INITIATIONS:

• Citigroup started shares of Companhia Vale do Rio Doce (NYSE: RIO) with a Buy rating and shares of StealthGas Inc (NASDAQ: GASS) with a Hold rating and $20 target.
  
• Roth Capital started shares of Internap Network Services Corporation (NASDAQ: INAP) with a Buy rating and $19 target.
  
• Raymond James initiated Atmel Corporation (NASDAQ: ATML) with an Outperform rating and Argo Group Internaional Holdings Ltd (NASDAQ: AGII) with a Strong Buy rating.

MOST NOTEWORTHY: Advanced Micro Devices, Hancock Holding, Town Sports and Gerdau SA were today's noteworthy initiations:

• Nollenberger started shares of Advanced Micro Devices (NYSE: AMD) with a Buy rating and $18 target. The firm believes the company's issues are widely known and already baked into the valuation and feels the Barcelona ramp and performance are likely ahead of expectations and demand for the latest family of ATI graphics is solid.
• B. Riley initiated shares of Hancock Holding Company (NASDAQ: HBHC) with a Buy rating of $43 target as the firm believes a higher premium is warranted given the company's superior growth prospects and conservative management profile.
• Town Sports International Holdings (NASDAQ: CLUB) was initiated with a Sector Outperformer and a $23 target at CIBC. The firm expects shares to be driven by improving fundamentals.
• Citigroup believes Gerdau SA's (NYSE: GGB) acquisition of Chaparral was expensive and will provide near-term headwinds for the stock, starting shares off with a Hold rating.

OTHER INITIATIONS:

• UBS initiated shares of Baker Hughes Incororated (NYSE: BHI), Halliburton (NYSE: HAL) and Schlumberger Limited (NYSE: SLB) with Buy ratings and targets of $102, $52 and $121, respectively.
• BMO initiated shares of Health Care Reit (NYSE: HCN) with a Market Perform rating.
  
• Lazard initiated shares of Micron Technology (NYSE: MU), SanDisk Corporation (NASDAQ: SNDK) and Silicon Motion Technology (NASDAQ: SIMO) with Buy ratings and targets of $14, $63 and $29.