With stock prices soaring, sentiment indicators were slipping as equity and options market traders awaited the results of Tuesday's

Federal Open Market Committee

meeting.

The

Chicago Board Options Exchange Volatility Index

was off slightly, while the CBOE equity put/call ratio was also on a downswing compared to Monday's reading. The volatility index, or VIX, was off 1.02% to 27.17, while the put/call ratio was down to 41 from 52 Monday. The VIX, the fear gauge of the options market, rises when put buying in the

S&P 100

increases. The S&P 100, also known as the OEX, was up 9.07, or 1.2%, to 785.60. (Buying a put is betting a stock or index will fall.)

Market participants are expecting the FOMC to raise its target on the federal funds rate by half a percentage point. Results of the meeting are expected to be released at 2:15 p.m. EDT.

Martin Galivan, a floor broker with

Investec Ernst

in the OEX pit at the CBOE, said it's been "very quiet" between the last expiration and the upcoming expiration. He said that players haven't been doing much adjusting ahead of the Fed meeting.

Equity and American-style options contracts for May expire Friday.

Galivan said that because there hasn't been a lot of movement ahead of the FOMC meeting, some interesting things could follow the announcement. "You could get a lot of volatility" in the wake of that news, he said. Galivan said that usually people will start positioning and adjusting starting a week and a half before expiration. However, they haven't done that in this instance because of the Fed meeting.

The June 30 in-the-money call options on

Countrywide Credit Industries

(CCR) - Get Report

were proving popular Tuesday, with more than 2,000 contracts changing hands and the company's stock up 3 3/8, or 12.2%, to 31 1/16. The June 30 calls on the

American Stock Exchange

were trading at 3 1/2 ($350), up 1 15/16 ($193.75).

The stock has spiked up sharply Tuesday, prompting the

New York Stock Exchange

to ask the company for a statement on its unusual stock moves.

In the takeover rumor department, some investors were biting a bit on options on some companies that lately have been said to be takeover targets. Investors were chewing on call options on

Allstate

(ALL) - Get Report

, which has been the subject of takeover chatter lately. Shares of Allstate were up 1/8 to 27. The June 27 1/2 calls were trading at 2 1/16 ($206.25), up 1/16 ($6.25), where 230 contracts have changed hands on the Amex. Meanwhile, the June 30 calls on the CBOE were trading at 1 ($100), down 1/16 ($6.25).

McMillan Analysis

, in its daily report, noted Tuesday that in Monday's session, a whopping 21,710 Allstate option contracts changed hands, compared with average volume of 4,741. Of the total number of contracts trading Monday, 20,237 were call options.