Hot Option Plays: Spring Cleaning Continues Before WeekendOptions Xpressupdated Apr 05, 2012TweetAt GET.com we maintain complete editorial integrity on our content & provide transparent & unbiased information. Companies don't pay us to include their products although we receive a compensation when you successfully apply to products from our partners. See how we make money here.At GET.com we maintain complete editorial integrity.Cusick's Corner 04-05-2012 There is good news and bad news. The good news is that U.S equity markets will be closed on Friday and the bad news is that U.S equity markets will be closed on Friday. We saw late day firming in stocks, gold, and oil, and this may be just some housecleaning into a highly anticipated, lightly traded bond and commodity session, but that could change if the employment data comes out worse than expected. With that said, shoring up risk into the weekend. There will be no XPOUND newsletters sent out on this Friday. Have a great weekend and I will report back on Monday! Stock market averages have battled back from morning losses and trading is mixed late-Thursday. The underlying tone remained cautious early, as stocks had moved broadly lower during the past two days after minutes from the latest FOMC meeting released Tuesday afternoon dashed hopes that Fed officials might initiate another round of quantitative easing. Today's economic news was light, however, and included Jobless Claims, which decreased by 6,000 to 357K last week. Economists were looking for a decline to 355K and the report did seem to hold some sway, as the Labor Department releases its key jobs data tomorrow morning. Meanwhile, crude oil has recovered much of yesterday's losses and is up $1.7 to $103.2 per barrel. Gold gained $17 to $1631 an ounce. With thirty minutes left to trade on Wall Street, the Dow Jones Industrial Average is off another 20 points, but the tech-heavy NASDAQ has erased early losses and is up 12 points.Bullish Avon Products (AVP) had a busy week. The activity kicked off Monday following reports that Coty Inc had made a $23.25 per share bid for the company. Avon rejected the offer. Shares rallied 17.3 percent to $22.77 on the news Monday and were able to build on the gains later in the week. The stock finished up 67 cents to $23.42 in heavy trading of 17.7 million shares Thursday. Meanwhile, options volume was 4X the daily average. 19,000 calls and 8,800 puts traded on Avon today. While July 16 puts were the most active in AVP, Apr 22, May 23, May 24, and May 25 calls were busy as well. Some players were possibly taking positions in short-term upside calls on Avon on hopes for a higher offer after Bloomberg reported that Coty is hoping to secure committed financing for the acquisition as soon as next week. Bullish trading was also seen in Dreamwork Animation (DWA), Watson Pharmaceuticals (WPI), and Rite Aid (RAD).Bearish Options action is picking up Supervalu (SVU) ahead of earnings. The company is due to report earnings next Tuesday and has dropped nearly 40 percent since earnings were last reported on January 11. SVU lost 26 cents to $5.13 and touched new 52-week lows Thursday on high volume of 9.1 million shares. Meanwhile, 13,000 calls and 15,000 puts traded on the stock. July 4 puts, which are 22 percent out-of-the-money, saw the most volume. 9,150 contracts traded, including blocks traded this morning at the 30-cent asking price. Some investors might be buying downside puts on SVU on concerns about further volatility in shares when the company releases its profit report next week. Bearish trading was also seen in Goodrich (GR), Estee Lauder (EL), and Frontier Communications (FTR).Index Trading Overall volumes picked up in the index market Friday. 544,000 calls and 708,000 puts traded on the S&P 500 Index (.SPX), the S&P 100 Index (.OEX), and other cash indexes Thursday; which is substantially more than the 478,000 calls and 590,000 puts traded the day before, according to Trade Alert data. A large trade in the CBOE Volatility Index (.VIX) was responsible for some of the higher volumes. In morning trading, one strategist sold 60,000 Apr 20 put - May 26 call strangles on the VIX at $3.95 to buy 73,000 Jun 19 - July 25 strangle for $5.30 per contract. The trade appears to be rolling activity, with the investor closing out a position in 60,000 Apr 20 puts and 60,000 May 26 calls while buying-to-open a new one in 73,000 Jun 19 puts and 73,000 Jul 25 calls. If so, they're paying hefty premium and apparently view that VIX may make a dramatic move higher and/or lower in the months ahead.ETF Action One of the top options trades today was in the SPDR Financial Fund (XLF). Shares lost 4 cents to $15.54 on a very lackluster day on Wall Street. Meanwhile, one investor bought 40,000 June 15 puts on XLF for 44 cents per contract and sold 40,000 June 13 puts at 11 cents. Both blocks traded on ISE, where sentiment data from the exchange confirm that the Jun 15 - 13 put spread was bought to open. If so, 33 cents was paid per spread and the strategist stands to make its best profits if XLF falls to $13 or less through mid-June, which represents a 16.3 percent slide in the next ten weeks. Since the fund holds all of the financial-related names from the S&P, the big spread is a view against the banks and brokers. It's possibly intended to help hedge a portfolio of financial names. 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