The majority of option activity Friday was earnings-driven, and traders focused on squaring away their positions before expiration.

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 down 2.4% to 15.72. The CBOE Nasdaq Volatility Index, a measure of the implied volatility of the Nasdaq 100, was down 5% to 15.52.

After a blowout quarter, Google ( GOOG) options were extremely active. The sharp rise in the stock after-hours Thursday left some traders scrambling this morning to buy back calls they were short. When trading options in a name like Google, expect the unexpected.

With the stock closing Thursday at $303.20, probably very few people expected the October 330 calls to be in the money a day later. Those calls have traded 12,000 contracts. The October 330 puts have traded 22,000 times and were down $28.50 on the day. The October 340 puts have traded 23,000 times and were down $33.80. Google shares were higher by $37.05, or 12.2%, to $340.25.

SanDisk ( SNDK) options were also driven by a better-than-expected earnings release. The October 50 calls have traded 6,300 times and were in the money. The October 55 calls traded 12,500 times.

The October 50 puts were heavily sold. The stock was up $8.29, or 17.9%, to $54.67.

Newmont Mining ( NEM) had the November 45 calls trade more than 13,600 times ahead of its earnings release next week. The buyer of the calls is expecting the stock to trade higher after the company releases its earnings. The stock was up 81 cents, or 1.9%, to $44.09.

Pfizer ( PFE) continued to trade lower after a disappointing earnings release Thursday. The December 22.50 calls have traded 15,600 times, and the December 25 calls traded 13,900 contracts.

The sellers of the calls aren't expecting Pfizer to trade higher from its current levels. The December 22.50 puts traded 9,800 times, and the December 25 puts changed hands 14,100 times. The stock was down 58 cents, or 2.7%, to $21.32.

Other stocks that had high option activity were Lennar ( LEN), Cablevision ( CVC) and Yahoo! ( YHOO).

Lennar's October 50 calls traded 9,900 times, and the October 55 calls were swapped 18,500 times. The stock was down 12 cents to $55.51.

Cablevision's January 2007 puts striking at 20 traded 16,100 contracts. The stock was up 49 cents, or 1.8%, to $27.98. Yahoo had the October 35 calls trade 11,400 times. The stock was up 20 cents to $35.46.

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