Today’s tickers: VIX, SLM, WM, COF, MIR, HL, GM, XLI

VIX – The market’s fear factor, as measured in the Volatility Index, redoubled today as record-losses at GM earnings, record-high oil prices and a market continuing to mop the floor with the U.S. dollar reminded traders what it meant to be a bear. The volatility index broke 24% higher this afternoon to register 26.56, with many traders seeking to take profit on positions in the single-largest contract in the VIX calendar, the November 25 call. Buying interest settled at the higher 27.50 and 30 strikes in November and December.

SLM – Student loan administrator Sallie Mae, the aggrieved party in a jilted takeover bid by a J.C. Flowers-led consortium, will have its day in court. Earlier this week, a Delaware trial judge set a tentative July court date for arguments in its legal tangle with J.C. Flowers, which reneged on a buyout of Sallie Mae after Congress passed legislation curtailing subsidies to federal student loan providers. Sallie Mae shares lost 4% to $41.18 today, double the downside in the broader market and within a dollar of its 52-week low. Implied volatility has ticked 21% higher on the session to exceed 51%. A look at the option action suggests that some traders may be taking advantage of its depressed share price and lower call-side premiums to wager on some upside for Sallie Mae shares in January. Heavy buying in the January 50 calls may have been involved in strangle buying with the 40 put in a non-directional, volatility play, but a look at the open interest suggests that may be a substantial “sleeping bull” contingent in Sallie Mae’s midst. Fully 20% of Sallie Mae’s total open interest is tied up in calls at the 50 strike in the November, December and January contracts.

WM - Shares in Washington Mutual , the nation’s largest thrift, slumped more than 17% this afternoon to $20.01 – a 7-year low, after the impact of a 72% drop in Q3 profits was compounded by reports that New York’s Attorney General is investigating a so-called “pattern of collusion” involving appraisals of mortgages bought by Fannie Mae and Freddie Mac from Washington Mutual and other banks. While implied volatility in an option series often recedes sharply after an earnings report (even a negative one) as the element of uncertainty pre- earnings disclosure dissipates, we observed just the opposite in Washington Mutual options today.