Another day of trading has led to another round of 52-week lows for some of the former stars of the

Nasdaq

. But those lows weren't scaring off people who wanted to play

Sun Microsystems'

(SUNW) - Get Report

options on the bullish side.

On a day when mostly ill winds were blowing through the market, Sun was unchanged at $17.44 at midday. As its shares bounced off its 52-week intraday low of $16.50 -- which it hit earlier in the session -- some undaunted options pros were taking a shot that Sun has found its bottom.

Dan Brady of

Letco

, the lead market maker in Sun options on the

Pacific Exchange

, said there was a sizable seller of the Sun April 15

puts this morning.

Selling the April 15 puts is basically a bet that the options will expire worthless and the seller will be able to keep the premium taken in against the obligation of buying Sun shares at 15 if the puts end up in the money. If the puts they sold were to expire

in the money, or are exercised before

expiration, they are obligated to buy Sun stock at $15 a share. Selling puts is generally a strategy used when a trader is positive on the underlying security.

Combined volume on those April 15 puts exceeded 10,000 this morning, with more than 6,800 of them trading on the P-Coast. The April 15 puts rose 3/16 ($18.75) to 1 1/8 ($112.50).

The volume in the April 15 puts today vastly outstrips the open interest (the total number of options contracts that have not been exercised or allowed to expire) in the puts, which stood at 3,365 contracts as of Friday's close, indicating the trading today was the initiation of new positions in that option.

Meanwhile, it appeared few people were making big bets in the options on

Ericsson

(ERICY)

, in the wake of that company's warning that it was going to lose money in the first quarter instead of breaking even as it previously forecast. Shares of Ericsson fell $1.75, or 21%, to $6.63.

It appears one investor did make a nondirectional play in the Swedish mobile-phone maker's options however, buying a

straddle in the April 7 1/2 options. It looks like the investor bought 1,000 of the April 7 1/2 calls and 1,000 of the April 7 1/2 puts. The investor isn't making a directional bet on Ericsson, but is instead hoping that the stock moves enough one way or another -- it doesn't matter which direction - to make the trade profitable.

A straddle is built when an investor purchases an at-the-money call and an at-the-money put, meaning the strike prices and expiration month of those options are identical. An at-the-money option has a strike price as close as possible to the current share price. Late this morning, the April 7 1/2 call was trading down 1 3/4 ($175) to 1/2 ($50) while the put was trading up 9/16 ($56.25) to 1 1/8 ($112.50).

For more on straddles, check out this

Options Forum.

If you were looking for a quote on the

Chicago Board Options Exchange Volatility Index

this morning, you were out of luck. And no, it wasn't your machine that was the problem.

Quotes were unavailable on the VIX from 9:45 a.m. to 10:36 a.m. EST, the CBOE said, due to a technical problem that has since been resolved.

As for the VIX, it was soaring amid the selloff, as was the

Amex's

volatility index based on options on the

Nasdaq 100 Unit Trust

(QQQ) - Get Report

, the QQV. The QQV rose 5.85% to 63.49. The QQV is still well off its all-time high of 75.40, where it closed on Dec. 20. Data for the QQV goes back only to September.

The VIX rises when put-option buying on the

S&P 100

, or OEX, increases. Investors buy put options to either protect long positions or to speculate on further downside in the underlying security. With the VIX around 33, that is still a ways away from its recent peak in late December, when it jumped as high as about 38.

Traders interpret the VIX and QQV as contrarian indicators, meaning the higher they go, the better, because they indicate fear via put buying in the options underlying the indices.

Another gauge of investor sentiment, the equity put/call ratio, was high, but the levels weren't sky-high. The overall equity put/call ratio, which includes trading from all of the nation's five options exchanges, was 0.76 late this morning, indicating anxiety, but not a lot of panic. There were times last fall when the equity put/call ratio soared above 1. The 0.76 level means that for every 100 calls that traded this morning, 76 puts traded. The CBOE equity put/call ratio was at 0.71 this morning.

Meanwhile, the CBOE equity put/call ratio 21-day moving average was still in an uptrend as of Friday's close. Some market watchers watch the 21-day moving average as a signal when to get into the market and exit. So far, with the moving average still in an uptrend, it is not giving off a buy signal. When the ratio peaks and turns down, that is when a signal is given off. And it's not there yet.