Yahoo! Call Interest Surges on Yang Going

Call-traders are in the catbird seat in Watson Pharmaceuticals (WPI - commentary - Cramer's Take) today, with contracts to buy Watson shares outstripping puts by 10 to 1 on overall volume some eight times the normal level today.

With shares up 1.4% at $23.11, traders are opening fresh positions in December $22.50 calls and January calls at strikes $20 and $22.50, and don't appear to be seeking these positions in spread formations that would cap upside expectations, or in concert with stock plays.

Implied volatility in all Watson options has come off some 20 percentage points from the October highs, which may have provided some incentive for option traders to step into bullish call positions. Yesterday, the company's application for prostate cancer drug Trelstar was accepted for filing by FDA regulators, who are expected to act on the application in the third quarter of next year (according to a company press release).

Know What You Own: Other companies of note in Yahoo!'s sector are Google (GOOG - commentary - Cramer's Take), Baidu (BIDU - commentary - Cramer's Take) and Netease (NTES - commentary - Cramer's Take).

---

At the time of publication, Darst had no positions in the stocks mentioned.

Rebecca Engmann Darst is the Portfolio Manager for TheStreet.com?s Options Alerts Portfolio newsletter and an equity options analyst for RealMoney Each Thursday at 6:30 a.m. EST, she delivers the early-morning lowdown on option volume and sector trends on CNBC's "Squawk Box." Prior to her work in the equity options market, she spent seven years in Scandinavia as a Copenhagen-based chief reporter for a European Commission news service, correspondent for Spanish daily El Mundo and Radio Netherlands, followed by stints at Nordea Bank and Saxo Bank.