Xerox Corp. (XRX)– The largest producer of high-speed color printers popped up on our ‘hot by options volume' market scanner this morning due to bullish options activity in the December contract. Shares of XRX are trading 3.5% higher to $7.99 today after the firm raised its 2011 profit forecast to $1.05 per share from 95 cents. Xerox posted third-quarter profits of 14 cents per share, surpassing average expectations of 12 cents per share, ahead of the opening bell today. Option traders appear to be making bullish bets on XRX by engaging in a couple of strategies. Plain-vanilla call buying in the amount of 2,500 contracts took place at the December 8.0 strike for 50 cents apiece. Investors long the calls may profit if shares rally 6% over the current price to surpass the breakeven point at $8.50 by expiration. Other investors put on bullish risk reversals. It looks like 3,700 puts were sold at the December 7.0 strike for 10 cents apiece to partially offset the cost of buying the same number of calls at the December 8.0 strike for 40 cents each. The sale of the puts lowers the effective breakeven point to $8.30. A 31 cent increase in shares to $8.30 would allow reversal players to breakeven by December's expiration day.

Sara Lee Corp. (SLE) – Reports that Proctor & Gamble is in talks to purchase portions of SLE's international household products unit pushed shares of Sara Lee up about 0.5% to $11.50 today. Option traders hoping to see further bullish movement in the price of the underlying picked up calls in the November contract. It appears more than 6,000 calls were purchased at the November 12.5 strike for an average premium of 25 cents apiece. Call-buyers are now positioned to accumulate profits if the stock increases by 11% to breach the breakeven point at $12.75. Such a move would push shares of Sara Lee to a new 52-week high over the current high of $12.00 attained on November 4, 2008.

Amgen, Inc.  (AMGN) – Bullish investors took advantage of the 5% decline in shares of the world's largest biotechnology company today by initiating option plays at reduced premiums. Shares of AMGN slipped 5% to $56.43 after the firm revealed third-quarter sales declined and U.S. regulators requested additional studies on its experimental bone drug. Option players jumped at the opportunity to trade calls toting premiums that have more than halved (in some cases) since yesterday.