By Jud Pyle, CFA, chief investment strategist for the Options News Network

Significant put activity in

Home Depot

(HD) - Get Report

has hit the tape the day before the largest home-improvement retailer announces first-quarter earnings.

Looking at June 22 puts, more than 6,000 of these contracts traded at 31 cents while 8,000 June 23 puts changed hands at 46 cents per contract in the first hour of trading today.

The June 22 puts, home to 12,500 contracts in open interest, are currently trading down 24 cents; the June 23 puts are currently off 35 cents and have existing open interest of 4,000. Implied volatility for the June 22 puts currently stands at 48, while the June 23 puts have an implied-volatility reading of 45.

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The June 26 straddle is currently trading at around $2.40, and HD shares have moved up $1.59, about 7%, to $25.99 so far today. The straddle is down a little bit due to market sentiment that the stock will move less than 9%. It's safe to say that HD option volume is heavy today.

Normal daily volume in HD is around 32,000 contracts, but more than 44,000 contracts have traded today with an hour left to go in the trading day -- most of that volume accumulated in the June expiration month.

HD shares increased after rival

Lowe's

(LOW) - Get Report

announced first-quarter earnings per share of 32 cents a share, which topped analysts' estimates by 7 cents per share. LOW shares are up $1.61, about 9%, to $20.07 in midday trading.

HD, based in Atlanta, reported a loss of 3 cents per share in the fourth quarter last year, and analysts estimate earnings per share of 29 cents in the first quarter and 55 cents in the second quarter. The 17% increase in the Bombay Sensitive Index, or Sensex, following India's election results this morning also may have positively affected HD stock.

Whatever the catalyst, it's important to note that looking at the June 26 straddle, the market is betting the stock will move less than 9%.

Jud Pyle is the chief investment strategist for Options News Network (www.ONN.tv) and the portfolio manager of TheStreet.com Options Alerts. Click here for a free trial for Options Alerts. Mr. Pyle writes regularly about options investing for TheStreet.com.

Jud Pyle, CFA, is the chief investment strategist for Options News Network. Pyle started his career in finance in 1994 as a derivative analyst with SBC Warburg. After four years with Warburg, Pyle joined PEAK6 Investments, L.P., in 1998 as an equity options trader and as chief risk officer. A native of Minneapolis, Pyle received his bachelor's degree in economics and history from Colgate University in 1994. As a trader, Pyle traded on average over 5,000 contracts per day, and over 1.2 million contracts per year. He also built the stock group for all PEAK6 Investments, L.P. hedging, which currently trades on average over 5 million shares per day, and over 1 billion shares per year. Further, from 2004-06, he managed the trading and risk management for PEAK6 Investments L.P.'s lead market-maker operation on the former PCX exchange, which traded more than 10,000 contracts per day. Pyle is the "Mad About Options" resident expert. He is also a regular contributor to "Options Physics."