Sometimes, the numbers lie.

That's a fact of life that some options traders faced this morning as the


gains ran up into the triple digits from the opening bell. One of the numbers that traders rely on is the equity put/call ratio, which has been showing strong call-buying for the past week despite the market's indecision.

Option strategists, who have made money in the past as contrarians, are seeing the kind of heavy call-buying that usually portends a slip in the market, but no such fall has materialized. Typically, they see increased positive speculation as a sign that the end of a rally is near because too many investors have discovered it. This time, the put/call ratio hasn't been as reliable as in the past.

"All the negative sentiment indicators are giving false signals," said Kevin Murphy,

Salomon Smith Barney

options strategist. "But we're happy that our clients who were buying calls are making money."

Murphy said the firm's internal put/call ratio, which records only new positions, has been showing call-action traffic moving five to seven times the put volume. "We've had some low put/call ratios. We've been seeing it for the past week," he said.

The firm has had some long call recommendations in place, including one on the

S&P 100

index options, Murphy said, and those have been profitable for clients. "It's been a powerful move," he added.

The kind of upside move of the past two sessions has not brought any major increase in volatility, and as a result, call prices have not spiked or become prohibitively expensive. While that's a problem for the call-buyers who took positions in the high-volatility environment earlier this year, it's consolation to those who want to jump in now and use calls as proxy investments for the underlying equity. "The vols are coming in, so calls are not going to be more expensive," Murphy said.

That leaves options holders hoping that the gain in the underlying stock price is enough to counteract the juice that an option's premium has lost with receding volatility. The

Chicago Board Options Exchange Volatility Index

fell 2.28 today to 25.90, more than 8% of its Thursday level.

Volatility is one component of options pricing. Among the others are time decay, interest rates and, of course, the price of the underlying equity. When investors buy calls during a period of high volatility, they're paying more for the options. If a stock-market rally slices into that volatility, their option's premium may not increase as much because one component is considerably weaker than it was when they purchased the option.


(CSCO) - Get Report

options were a prime example of that kind of volatility skew. The March 110 calls traded more than 2,700 contracts, but the price of the play stayed flat despite the stock picking up 2 5/8 to 100 7/8.

Among the busiest options this morning was

General Motors

(GM) - Get Report

, where the April 95 calls traded almost 3,000 contracts by midday. The premium on the contract hit 2 1/8 ($212.50) as volume appeared for the first time at the strike price.

GM was up 3 11/16 to 89 7/16.

On the speculative side of the market,

CNA Financial

(CNA) - Get Report

call options were trading as though pros were expecting a pop in the shares.

As CNA's shares jumped 1 1/4 to 35 7/16, volume on the March 35 options reached 275, and the premium expanded 1 11/16 ($168.75) to 2 1/8 ($212.50). With March options expiring March 19, whatever move traders are expecting may not be too far down the road.