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With both the Dow Jones Industrial Average and the Nasdaq Composite Index riding high today, some old favorites from the glory days of technology were seeing strong options activity.









were among the most actively traded options Tuesday.

There was heavy volume in the April 60 calls of Microsoft, enough to drive its premium to $2.25 ($225), a rise of 0.95 ($95). At midday the number of contracts on those April 60 calls was roughly 18,000, compared to an open interest of about 90,000.

Microsoft was up $4.72 to $59.85 early Tuesday afternoon.

Investors were also chasing the April 65 and 70 calls, with the 70 calls trading more than 10,700 contracts earlier Tuesday morning. According to Dave Schultz of

Summit Capital Holdings

, if the company can come out of the appellate courts relatively unscathed, Mister Softee could firm up in a hurry, especially if trading volume is focused on sector leaders.

Erstwhile highflier



was relatively busy as well, with May 50 and 55 calls seeing the most action as the stock climbed $4.66 to $49.90.

Schultz said he believes the San Diego, Calif.-based company is also an attractive stock and could benefit from the resolution of the current dispute between the U.S. and China.

The Nasdaq tracking stock or



, which typically experiences heavy volume, traded even higher today as bullish sentiment began to resurface in the market.

At-the-money QQQ call volume dwarfed action in the put options. In the range of the 38 and 43 strike prices, there were more than 120,000 contracts traded. Schultz stresses that institutions need to see a sustained increase in the market; that is, their holdings have to be up a buck or two at week's end before they can adopt a more aggressive strategy

Schultz, whose fund is long both Microsoft and Qualcomm, views this stabilization of the market as an opportunity to trade out of the QQQ before the end of this truncated week, and come back in on Monday or Tuesday to get back in. He says that at this point in time it is more practical to buy the individual options on Microsoft and Qualcomm, rather than investing in the QQQ, which would be a riskier play.

The QQQ was up $2.95 to $40 on the rally.

As for Schultz's overall take on the market, he thinks this rally is the real deal and that investors should look to "buy on the pullbacks."