While the love boat for

Unisys

(UIS) - Get Report

call options

continued Tuesday, raising flags for options market analysts, however, today's action has slowed substantially.

After a nice rally recently, shares of Unisys were pulling back Wednesday, off 56 cents to $15.69.

Last week at a meeting with analysts, the company said it was pondering exiting its federal computer services business and that it would cut 5% of its work force, or about 2,000 jobs. The company also said it expects fourth-quarter earnings, before charges, to meet Wall Street analyst expectations.

Ahead of the analyst meeting last week, options traders had placed their bets in call options on Unisys. Call options, which appreciate along with a rise in the underlying security, gives the purchaser the right to buy the underlying security for a certain price by a specific time.

On Dec. 4, Unisys closed at $12.13. Since then, the stock has rallied handsomely, to close Tuesday at $16.13, a gain of 34%.

Volume in Unisys options Tuesday was monstrous, and a mile above the average daily volume in the options. Most of the whopping volume in the options came on the call side, indicating perhaps a lot of bullishness still on the stock going forward. Open interest (the number of options contracts opened and in existence) continued to lean sharply to call options.

In the daily market report, Larry McMillan of

McMillan Analysis

noted high volume in the options on Unisys and the fact that the stock made a relative new high Tuesday. According to data from McMillan, 21,761 contracts traded Tuesday, with a whopping 20,840 of those contracts call options.

About 8,800 of Tuesday's contracts were in the January 15 calls, compared to open interest of approximately 20,000 contracts as of Monday's close. Open interest was nearly 28,000 contracts as of Tuesday's close, indicating that traders kept the majority of those Unisys trades intact. The January 15 calls were trading down 1/8 ($12.50) to 1 7/8 ($187.50) on the

Chicago Board Options Exchange

. Meanwhile, the January 15 puts were down 1/16 ($6.25) to 1 1/8 ($112.50).

Joe Sunderman, an analyst at options firm

Schaeffer's Investment Research

, pointed out that Unisys currently has a put/call ratio of 0.26. At that level, that put/call ratio is lower than 98.8% of the past year's readings. Sunderman said that the put/call ratio on the options hasn't been that low since about July. Generally, when a put/call reading is lower than 95% of the readings for the past year, that is bearish, according to Schaeffer's.

"I'm surprised to see such an open interest configuration on a name that's been a laggard relative to everything else," Sunderman said.

In the contrarian school of thought pervasive in the options market, all that call open interest is bad news for the stock. Contrarians believe that with so many people putting their bets in calls, which are bullish bets, that the opposite of what the vast majority are doing will occur.

Market chatter and speculation that

Lucent

(LU)

is going to get taken over, and that

Nokia

(NOK) - Get Report

may make a bid for the company, continued to swirl in the options market, according to some options traders.

One Wall Street options trader said that people were buying January call options on Lucent. Shares of Lucent were rallying again Wednesday, up $1.63, or 8.7%, to $20.31.

The implied volatility on Lucent options was "through the roof," the trader said.

Rising implied volatility, the annualized estimate by the market of how much the underlying security can move, shows traders willing to pay more for Lucent contracts and thus, anticipation a dramatic move in the underlying shares.

The January 20 calls were seeing robust interest, with a little more than 8,700 contracts trading across all options exchanges, with the heaviest volume on the

Philadelphia Stock Exchange

, where more than 4,100 of the January 20 calls traded. The calls were up 3/4 ($75) to 2 3/4 ($275).

The CBOE equity put/call ratio has been very high over the past two months and Schaeffer analyst Sunderman said he's seeing a similar pattern in the equity put/call ratio 21-day moving average. That's similar to the bottom of 1998, and "That is notable on the equity options side."

On the flip side, however, Sunderman pointed out that in general, many technology issues, due to long-term equity anticipation securities, or LEAPS -- the industry moniker for such contracts -- and the nature of LEAPS, a lot of technology stocks are going to have heavy call open interest overhead. From his shop's perspective, it could create resistance due to out-of-the-money call open interest. (That happens mainly because traders who

sold

those contracts will sell the shares they're holding as a hedge if the contracts appear to be expiring worthless. That selling of shares naturally puts downside pressure on shares.)

He said that open interest reflects a lot of bullish best on tech stocks, and "that has us concerned with the

Nasdaq

in general.

One stock that stands out as far as heavy call open interest overhead is in options on

EMC

(EMC)

. EMC "has a lot of call open interest overhead," particularly the January 95 call strike price, which has open interest of 30,000 contracts, Sunderman said. EMC was trading up $1 to $83.13. The January 95 calls were up 1/8 ($12.50) to 3 ($300) on the CBOE.

Another bearish item, at least from a contrarian viewpoint, for technology stocks -- with which the Nasdaq is loaded -- can be seen in options on the

Nasdaq 100 unit trust

(QQQ) - Get Report

.

Sunderman pointed out that the put/call ratio on the QQQ from the front three months is 0.53; 97% of the readings over the past year have been higher. "A lot of people are looking for that bottom and they're gravitating toward the calls on the QQQ," he said.

The underlying QQQ was down $1.66 to $70.