After months of looking like the light of day would never again shine on the oil-services stocks, the sector is seeing a healthy pop, and options traders are square in the middle of it.

Trading in the

Philadelphia Stock Exchange's Oil Services

index (OSX) was percolating as call-buyers pushed the action in both the March and April options.

Buying calls indicates the belief that a stock or index will continue to rally and the investor can profit from the increase in the contract's value as the price of the stock climbs.

Tom Burnett, senior trading adviser at

Wall St. Access

, has been watching the sector for the past several months and enjoyed the action of the past two days. "It's a cheap group in a strong market," he said. "There are still some problems, but there are factors that add up to a trading pop."

An indication of that sentiment was seen in the OSX, which rose 3.06 to 54.26 by midday. The March 55 calls posted volume of more than 6,000 contracts as the premium expanded 1 ($100) to 2 ($200). The heaviest traffic was in the April 50 calls, however, where midday volume hit 10,509.

Traders said that volume was the work of several players, not just one smart-money mover playing the sector. "It's a bunch of new players today," said one Philadelphia-based options pro.

Burnett, however, said he wasn't sure how long the oil-services rally would continue. "Sometimes when a stock or a sector is very depressed, these situations just happen," he said. "We've gone from 47 to 54, and it's been a nice trading opportunity. I don't think it's permanent."

Some of the names in the sector also attracted call-buyers.


(HAL) - Get Report


Transocean Offshore

(RIG) - Get Report

were the busiest. At midday, Halliburton's call volume topped the most-active list at the

Chicago Board Options Exchange

, and Transocean held the same place on the Philly exchange.

Halliburton's in-the-money March 30 calls traded more than 4,200 contracts as the price jumped 1 1/4 ($125) to 2 3/4 ($275).

Transocean's March 20 calls also benefited from a rally in the shares. The premium on those calls rose 1 3/8 ($137.50) to 3 1/4 ($325) on volume of 2,428.

Paul Foster of

pointed to rising volume and implied volatility in insurance company

CNA Financial

(CNA) - Get Report


Increases in both of those measurements usually indicate a belief in one corner of the market that the company's shares are in for some kind of pop.

Foster said the average daily options volume was about 15 contracts until Tuesday, when volume soared through the 300 mark. That action continued yesterday and today, with 100 calls traded early in the session.

The company's shares were up 1/4 to 34, and the March and April 40 calls each traded 50 contracts. While the volume is tiny, Foster said the implied volatility -- the expected trading range of the stock -- increased to 57% from the low 30 level.