After being dormant for some time, volatility in the option market is starting to trend upward as earnings season gets under way.

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 4.04% to 15.18.

The CBOE Nasdaq Volatility Index, a measure of the implied volatility of the Nasdaq 100, was rising 1.68% to 16.90.

The S&P Depositary Receipts ( SPY) had buyers of puts. The October 121 puts have traded 13,000 contracts, and the December 117's have traded 25,000 times. The ETF itself was down 61 cents to $119.

General Motors ( GM) had heavy put buying after former unit Delphi Corp. ( DPH) filed for Chapter 11 bankruptcy protection. The negativity comes about because GM potentially could be liable for billions of dollars of obligations if certain pension guarantees are enforced.

GM's October 30 puts have traded 13,700 times, and the December 25 puts have been swapped 4,500 times. The January 2007 puts striking at 5 have traded 4,400 contracts, while 25,000 of the January 2007 10 puts have been exchanged. The January 2008 10 puts have traded 12,700 times.

Shares of GM were trading down $1.23, or 4.35%, to $27.06. Delphi was down 63 cents, or 56.25%, to 49 cents.

Pfizer ( PFE) had activity in almost every month. The October 25 calls have traded 20,900 times, and the October 25 puts have traded 7,900 contracts. The November 25 puts have traded 9,000 contracts, while 5,900 of the December 25 puts have changed hands. The March 25 calls have traded 15,000 contracts. The stock was up 4 cents to $24.43.

Elsewhere, American Express ( AXP) had its April 50 calls trade 13,000 times. The open interest for the strike prior to the trade was 11,000 contracts. The stock was down 15 cents to $49.67.

eBay ( EBAY) had buyers of the October 42.50 calls 9,800 times and buyers of the November 45 calls 5,400 times. The stock was up 94 cents, or 2.36%, to $40.84.

EnCana ( ECA) had activity in its April 60 calls, which have traded more than 79,800 contracts on the day, doubling the open interest for that strike. The stock was down $1.66, or 3.28%, to $49.

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