Talisman Energy (TLM) is up $0.36, or 2.7%, to $13.11 this morning after a filing released Monday afternoon showed activist investor Carl Icahn taking a 5.97% stake in the Canadian oil and gas company. The stock has now rallied 18.1% over the past two weeks amid a flurry of bullish options activity. A similar story seems to be unfolding in Burlington, MA software maker Nuance Communications (NUAN).

The word Talisman means "good luck charm" in Arabic and the price action in TLM is indeed providing some very good luck to recent call buyers. Over the past month, 134,000 calls have traded on the ticker (vs 21,000 puts) and the flow has created 43,000 contracts of new open interest in TLM call options, while put OI has barely budged.

On October 1, when shares were at $12, buyers were dominating the action and paying $0.35 to open 12,000 Jan 14 calls. Those same contracts are now trading for $0.80. On October 2, call volume increased to 57,000 contracts. The top trade was a bullish risk-reversal in which Jan 11 puts were sold to buy Jan 14-strike calls for $0.04, 7,000X. Those Jan 14 calls now fetch $0.40.

Meanwhile, NUAN is up $0.20, or 1.1%, to $18.69 this morning and a similar story might be unfolding, as Carl Icahn just won two seats on the company's Board of Directors. On September 3, the New York Post had an article suggesting the Icahn was involved with NUAN might push for the company to tie-up with Apple (AAPL). In options trading, NUAN saw a flurry of activity yesterday ahead of the news, led by opening buyers of October and November 19 call options. Open interest in NUAN calls is now 174,303 and the highest levels in more than a year.

In today's environment, where headlines from Washington spur whippy and choppy market action, the best trading opportunities are often in individual names. There's just too much uncertainty on the macro front. Therefore, looking at M&A stories, earnings plays and signs of increasing activist interest (or disinterest) can help spot trading ideas and opportunities. Tracking the options order flow and spotting unusual trading activity gives us more of an edge.

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