The

Dow

was down a buck-fifty, closer to 9500 than 10,000. Are options players worried yet?

Not quite, according to the kind of traffic generated by index option traders today. "We can't really derive much from the options market today," said

Salomon Smith Barney

options strategist Leon Gross.

Gross said, however, that the short-dated volatility readings (that means, essentially, the price of April

S&P 100

index options) aren't running away. Using the

Chicago Board Options Exchange Volatility Index

, up about 8% to 28 today, Gross said the reading isn't showing tremendous concern.

"We're not seeing a lot of index action, and people aren't paying up a lot to get into positions," Gross said. "The VIX had been sitting at 25 for a while, but it also spent a lot of time in the 30s last year. We're still nowhere near that." The OEX was down 13.23 to 636.32.

Today, there was some action in the OEX April 640 puts, which traded 2,500 contracts. That trading helped the premium increase 6 3/4 ($675) to 17 3/4 ($1,775). The April 630 put volume was up to 2,100 contracts by lunchtime on Wall Street, and the price of the contract hit 13 1/2 ($1,300), up 5 3/8 ($537.50).

R.F. Lafferty

options head Jay Shartsis wasn't as convinced. After mocking Dow 10,000 as a "false god to begin with," he said he's worried about clusters of open interest in the OEX 690 and 700 calls. Those clusters create an impression of complacency that bothers traders with bearish tendencies, such as Shartsis.

The heaviest OEX open interest in the April puts was at the 650 strike, where almost 7,000 contracts had been opened. "That's a bearish juxtaposition," Shartsis said.

The tech stocks continued their slide. Naturally, trading on

Dell

(DELL) - Get Report

,

Microsoft

(MSFT) - Get Report

and

IBM

(IBM) - Get Report

was heavy on the put side.

But standing out from the tech crowd today was

Texas Instruments

(TXN) - Get Report

, which fell more than 7 to 93 1/2 by midday. That precipitous drop sparked heavy trading on the company's April 95 and 100 puts. The volume at each strike passed 1,000. The price of those April 95 puts rose 2 5/8 ($262.50) to 6 1/4 ($625).

Chicago traders in the

Pathogenesis

(PGNS)

crowd dodged a bullet today in the wake of the biotech firm's statement that it wouldn't meet analysts' first-quarter estimates.

Typically, when a stock moves as quickly as Pathogenesis did in afterhours trading -- it's down 27 to 12 today -- options traders get killed because they can't hedge themselves adequately. That situation is exacerbated when "smart money" takes positions immediately ahead of the news.

Yesterday, however, there was little trading ahead of the bad news from Pathogenesis, so the CBOE crowd didn't have to worry about the rapidly falling stock, sources said. "There was maybe one 50-lot that traded," said one options pro familiar with the crowd. "There was no pretrading at all. It's a victory."