iShares MSCI South Korea Index Fund (EWY) April put option implied volatility is at 25, July is at 29; compared to its 26-week average of 27, according to Track Data, suggesting less near-term price movement compared to outer month risk.

CBOE Volatility Index (VIX) closed up 1.53 to 19.44.

Option volume leaders today: Apple (AAPL), Citigroup (C), Netflix (NFLX), Kraft (KFT), according to Track Data.

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

Charles Schwab (SCHW) has announced its decision to acquire optionsXpress (OXPS) in a friendly all-stock deal. This deal will help Schwab compete with other firms like E-Trade (ETFC), Ameritrade (AMTD), and Bank of America (BAC), which all have large online brokerage services and are vying to provide investors with the best tools and services.

The deal, which is expected to close by the third quarter of 2011, will cost Schwab $1 billion, and the company will issue 60 million new shares to swap each outstanding share of optionsXpress with 1.02 of its own shares. Our $19.74 price estimate for Charles Schwab is at a premium of almost 12% to its current market value.

Berkshire Hathaway (BRK.B) overall option implied volatility of 21 is below its 26-week average of 24, according to Track Data, suggesting decreasing price movement for Warren Buffett's conglomerate.

Wendy's/Arby's (WEN) overall option implied volatility is at 40, below its 26-week average of 47, according to Track Data, suggesting less risk into its investor's day on January 27.

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

"Home Prices Are About to Bottom" was the headline for the Barron's cover story the week of July 14, 2008. The story explained that the housing market should level off in many areas of the country by the end of the year.

I have made some equally unfortunate prognostications in my tenure at BloggingStocks, so my purpose is not to poke fun at Barron's but to point out that here we are, over two years later, and it is still debatable whether the housing market has bottomed out.

Right now you could sell a put option on Intel (INTC) and pocket a bunch of cash," says Karim Rahemtulla. The contributing editor to White Cap Research explains, "There's no time like a down market to enter 'potential' positions in high-quality stocks."

"Thing is, as volatility continues to ramp-up, options premiums increase right along with it. This means when you buy options, you'll pay more. And when you sell options, you'll get more.

One Intel (INTC) investor placed a sizable bullish bet earlier this morning by selling puts and buying calls to simulate a long stock position using options. Shortly after 11:00 AM, this investor bought roughly 10,000 October 25 calls for 47 cents apiece and simultaneously sold 10,000 October 18 puts for 80 cents apiece, collecting a total of 33 cents per spread. Both the call and the put are out-of-the-money, each by about 16%.

Because this type of spread carries a similar risk profile as Intel long stock (without the required capital needed to buy the shares outright), it is occasionally referred to as a "synthetic long stock." Since the call and put are at different strikes in this trade, the strategy is technically called a "synthetic long stock – split strikes."