Volatility held relatively steady in the options market Friday as traders braced for the news out of Texas and Louisiana.

The CBOE Market Volatility Index (VIX), which is based on the implied volatility of the

S&P 500

options and is used as a gauge for fear in the market, was recently up 0.3% to 13.37. The CBOE Nasdaq Volatility Index (VXN), which measures the implied volatility of the Nasdaq 100, was recently down 0.46% to 15.23. Volatility spiked on Thursday as Hurricane Rita strengthened on its course toward Galveston, Texas.

Oracle

(ORCL) - Get Report

topped the most active list after the company reported disappointing earnings last night. There were sellers of calls and buyers of puts as the stock traded lower. The October calls have traded 14,000 times; the October 13 puts have traded 6,100 times; the November 13 have traded 4,000 times; the March 11 calls have traded 10,100 times; and the March 13 calls have traded 17,400 times. The stock was down $1.20, or 8.88%, to $12.32.

Retailer

Limited Brands

(LTD)

saw activity in its puts in early action. The November 20 puts have traded 10,000 times. The open interest for the strike was 780 contracts. Limited is scheduled to release its earnings on Nov. 17, and traders could be taking positions ahead of that. The January 2006 20 puts also traded 10,000 times and the open interest for that strike was 1,900 contracts. The January 2008 20 puts have traded 11,800 times and the open interest for that strike was 30 contracts. The stock was up 18 cents, or 0.89%, to $20.33.

MCI

( MCIP) saw a buyer of the October 27.5 calls 11,300 times. This looks like a pure speculation play in hopes that MCI will trade significantly higher before the next options expiration, which is Oct. 21. The stock was down 3 cents, or 0.12%, to $25.34.

Cyclical stock

International Paper

(IP) - Get Report

had a seller of the January 2006 calls 10,800 times. The calls were lower by 10 cents. The stock was down 41 cents, or 1.35%, to $30.02.

Wal-Mart

(WMT) - Get Report

saw bullish activity in early trade. The October 45 calls have traded 4,000 times and the March 40 calls have traded 10,300 times. The stock was up 32 cents, or 0.74%, to $43.51.

After a weaker-than-expected earnings release,

Palm

( PALM) saw sellers of calls and buyers of puts in its October options. The October 30 calls have traded 4,000 times and the October 35 calls have traded 2,200 times. The October 30 puts have traded 3,000 contracts. Palm was down $6.24, or 17.84%, to $28.73.

Global Payment

(GPN) - Get Report

had its October 70 calls traded higher more than 150% on light volume after the company announced better than expected earnings and gave a bullish outlook for the year. The stock was up $7.36, or 10.9%, to $74.87.