Bear Stearns (BSC: sentiment, chart, options) has certainly attracted its fair share of attention this week following an emergency bailout by the Federal Reserve and J.P. Morgan Chase (JPM). Now, according to The Wall Street Journal's David Gaffen, the Securities and Exchange Commission is investigating the possibility that Bear Stearns' near-collapse was exacerbated by market rumors and panic selling. Writing in his MarketBeat blog, Gaffen notes that "In the days leading up to the collapse of Bear Stearns the options market exploded, with massive bets on disaster that seemed outlandish, but ultimately have proved profitable as large hedge funds bet on the stock tanking (which it did)."

In fact, nearly one week after the Bear mess began to unravel, the stock has seen a general explosion in open interest but it's actually call options that have seen the biggest rise in popularity, at least among near-term options. Since last Thursday, March- and April-dated BSC calls have swelled by 181%, compared to a meager 38% increase for comparable put open interest. The Schaeffer's put/call open interest ratio for Bear now rests at 0.79, just 1 percentage point away from an annual low.

Bullish option activity on Bear Stearns may seem outlandish today, but as Gaffen points out so did those bets on the stock's decline just a week ago. Perhaps investors are encouraged by a declaration from brokers at Punk Ziegel today that the financial crisis is over? (Yeah, I know... I almost spit out my coffee.)