Best Buy (BBY) is scheduled to unveil its fourth-quarter results Thursday morning, with analysts anticipating a profit of $1.85 per share -- little changed from the big box retailer's year-ago earnings of $1.82 per share. Best Buy has been hot-and-cold on the earnings front; during the past four quarters, the company has topped consensus bottom-line estimates twice, and fallen short on two other occasions.

Ahead of the quarterly report, one options player built a bullishly biased spread on BBY. Right after the opening bell Wednesday morning, the trader purchased 358 April 32 calls, and simultaneously sold 716 April 35 calls. In other words, two April 35 calls were sold for every one purchased April 32 call. This strategy is known as a ratio call spread, and it's typically used by traders who are bullish on the underlying equity -- but with a very specific upside target in mind.

Friday morning, the good folks at JPMorgan Chase (JPM) kicked off a wave of quarterly reports from the banking sector. Next week, we'll hear the latest earnings results from the likes of Citigroup (C), Goldman Sachs (GS), and Wells Fargo (WFC), just to name a few.

Of course, the biggest bank in the nation -- Bank of America (BAC) -- also has a quarterly report on deck. Ahead of next Friday's fourth-quarter release, one speculator opted to construct a high-volatility options strategy on BAC.

Options players rushed to place their bets on The Gap (GPS) Tuesday, with volume rising to five times the norm within the first hour of trading. Taking a closer look at the major block trades, it looks as though one speculator is anticipating a major price swing from GPS during the next year.

Specifically, the trader opened a long strangle on GPS by purchasing 2,619 January 2012 20-strike calls, and simultaneously buying 2,619 January 2012 17.50 puts. This two-legged option strategy allows the trader to benefit from a drastic move in the underlying equity, regardless of whether the shares move higher or lower.

Bank of America (BAC) has grabbed some headlines lately, for better or worse. Earlier this week, WikiLeaks founder Julian Assange claimed he would release documents next year pointing to an "ecosystem of corruption" at a major U.S. bank, and many journalists connected a trail of dots leading back to Bank of America. As a result, the stock slipped 3% on Tuesday.

However, Bank of America bounced back with the rest of the market on Wednesday, after one executive at the Charlotte-based bank downplayed the growing speculation. During the course of the session, call volume on BAC rose to two times the usual level, with about 593,000 contracts crossing the tape.

Puts were unusually popular on Bank of America (BAC) Monday, with volume rising to 1.50 times the expected level. Roughly 144,000 puts changed hands on the Dow component during the course of the session, easily outpacing the banking baron's predicted daily volume of 96,000 contracts.

Taking a closer look at the day's major block trades, it looks as though one speculator is expecting a modest pullback from BAC during the near term. In afternoon action, a block of 20,000 November 13 puts traded at the ask price, suggesting they were purchased. Simultaneously, a block of 40,000 November 11 puts crossed the tape at the bid price, indicating they were most likely sold. Open interest rose substantially at both strikes overnight, confirming that these were all freshly opened positions.

Option volume was unusually heavy on Weyerhaeuser Co. (WY) on Wednesday, with roughly 26,000 calls and 29,000 puts crossing the tape. This flurry of activity represented about 20 times the equity's predicted daily volume. After taking a closer look at the day's major trades, it looks as though one speculator opted to initiate a long strangle on the stock.

Specifically, the trader bought to open about 10,000 August 17 calls, and simultaneously bought an equivalent number of August 14 puts. With WY trading at $15.50 at the time of these transactions, both options were out of the money by exactly 1.5 points.

Is Veeco Instruments (VECO) on the verge of a pullback? One options speculator placed a bearish bet on the stock yesterday by building a three-legged debit spread in the stock's newly front-month August series of options. Judging by the structure of the spread, the trader is looking for VECO to drop as far as $33 per share by the time August-dated options expire on the 20th.

Last Friday, bailed-out mortgage lender Fannie Mae (FNM) was the target of a skeptically skewed options strategy. Around midday, the stock's January 2012 1-strike put and 1-strike call each traded a block of 9,995 contracts, both of which were marked "spread." The put options traded at the ask price, suggesting they were purchased, while the calls changed hands closer to the bid price -- indicating they were sold. Open interest at both strikes surged by roughly 10,000 contracts over the weekend, confirming that all of the contracts involved were newly opened.

By simultaneously buying the January 2012 1-strike puts and selling the January 2012 1-strike calls, this speculator has initiated a synthetic short position on Fannie Mae. The purchase of the long puts will allow the trader to profit from any decline in the share price during the long term.

The J.M. Smucker Company (NYSE: SJM) is one of those plays that doesn't get a whole lot of media coverage, but that in no way takes away from the company's solid business model.

Earlier, I noted SJM's diverse revenue streams in it spreads/foods businesses, and more-recently its coffee (Folgers) business. Moving forward, include cost containment in the list of positives: JSM should benefit from a drop in commodity/ingredient costs.

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

Volatility Index S&P 500 Options-VIX up .03 to 10.27.

Huntsman Corp. (NYSE:HUN) option implied volatility suggests larger Risks on Chairman remarks

Huntsman is a large chemical company controlled by private equity investor David Matlin and Jon Huntsman. Bloomberg is reporting that Chairman Jon Huntsman said the company may sell itself after transition. On 1/31/06 the Wall Street Journal reported HUN was in discussion to be sold for more than $4.3 billion. HUN has a market cap of $4.5 billion. HUN option implied volatility of 31 is above its 26-week average of 27 according to Track Data, suggesting larger price fluctuations.

Occidental Petroleum Corp. (NYSE:OXY) option volume Heavy as volatility up on renewed takeout Chatter

Occidental Petroleum operates in two segments: oil and gas and chemical. OXY is recently up $.69 to $47.86 on renewed and unconfirmed takeover chatter. OXY has a market cap of $39.5 billion. OXY reported September 2006 quarterly revenue of $4.6 billion. OXY has long term debt of $2.2 billion. OXY call option volume of 15,367 contracts compares to put volume of 2,047 contracts. OXY March option implied volatility of 33 is above its 26-week average of 31 according to Track Data, suggesting decreasing price fluctuations.