Ahead of the open this morning, Borders Group Inc. (BGP: sentiment, chart, options) narrowed its third-quarter loss to 63 cents per share from $2.90 per share last year. On an operating basis, BGP said it lost 65 cents per share, besting Wall Street's expectations for a loss of $1.25 per share. Despite the better than expected results, BGP shares have plunged nearly 13% so far today.

Surprisingly, put volume is nonexistent for the security. Instead, call activity is dominating the options landscape. More than 15,000 of these usually bullish bets have traded so far today, pushing overall options volume to more than 149 times the stock's daily average. Practically all of this activity has traded on BGP's January 2010 5 call, with 15,062 contracts trading on open interest of 19,537 contracts. Within the volume at the January 5 call, two blocks, totaling 5,070 contracts, traded for the ask price of $0.10 at 11:52 a.m. Eastern time.

Overall, call activity has been heavy on BGP, with the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.07 ranking below two-thirds of all such readings taken during the past year. However, with the shares trading in the $2 range, this activity is to be expected, and there is very little room for continued decline, making 2.50 and 5 strike puts quite unattractive from a return perspective.