By Jud Pyle, CFA, chief investment strategist for the Options News Network

Shares of super-regional bank State Street ( STT) are currently trading around $34.60, up fractionally in today's trading. Since its March 9 close of $17.61, the stock has nearly doubled. Clearly, the five-week bull run we've seen in the broader market has been especially good for STT. But today we saw some put activity hit the tape, which could suggest investors are seeking some protection in case of a potential pullback in the STT shares.

Looking at the STT Aug. 25 puts -- out-of-the-money by nearly 30% -- we see that more than 17,000 have traded today. The puts are currently trading for around $3.90 with the stock near $34.60. Current open interest in the puts prior to today's trading action was just 1,554, according to the Sidewinder report at

What is interesting about this activity is that the bulk of the put volume has been dominated by buyers, which has served to push up the implied volatility of the puts. Last night, the puts closed at 3.40 cents with stock at $34.53. That computed to an implied volatility of 103.

Now, with the options at $3.90 and the stock at $34.60, that is an implied volatility of 112. Intuitively as well, you can tell that implied volatility is higher because the put price has increased 50 cents, with the stock rising slightly!

Put-buying, such as what we are seeing today on State Street shares, does not necessarily mean that investors should run right out and sell all of their shares in STT. It's just a group of traders that may have an intermediate-term bearish feeling on the stock. However, it is worth noting that the option market saw plenty of activity like this prior to the last market swoon that started in early February and ran until the March 9 bottom.

Jud Pyle is the chief investment strategist for Options News Network and the portfolio manager of Options Alerts. Click here for a free trial for Options Alerts. Mr. Pyle writes regularly about options investing for
Jud Pyle, CFA, is the chief investment strategist for Options News Network. Pyle started his career in finance in 1994 as a derivative analyst with SBC Warburg. After four years with Warburg, Pyle joined PEAK6 Investments, L.P., in 1998 as an equity options trader and as chief risk officer. A native of Minneapolis, Pyle received his bachelor's degree in economics and history from Colgate University in 1994. As a trader, Pyle traded on average over 5,000 contracts per day, and over 1.2 million contracts per year. He also built the stock group for all PEAK6 Investments, L.P. hedging, which currently trades on average over 5 million shares per day, and over 1 billion shares per year. Further, from 2004-06, he managed the trading and risk management for PEAK6 Investments L.P.'s lead market-maker operation on the former PCX exchange, which traded more than 10,000 contracts per day. Pyle is the "Mad About Options" resident expert. He is also a regular contributor to "Options Physics."