The ETF traded over 113,000 options on total daily average option volume of just 23,164. The largest trades were closing call spreads in Aug and a huge open long in Jan '11 17.5 calls. The Stats Tab and Day's biggest trades snapshots are included (click either image to enlarge).
The Options Tab (click to enlarge) illustrates the action (note this is just the front month and Jan '11). From what I can tell the Aug trades closed on both lines (sold long OI in Aug 15 calls, bought short OI in Aug 16 calls). The Jan '11 17.5 calls look like purchases on long OI. With the OCC missing OI data today, it's hard to be sure, but that's my best guess.
The Skew Tab snap (click to enlarge) illustrates the vols by strike by month.
We can see the Jan '11 skew looks nice and normal; no kinks formed from the buying other than a slight upward swing at the very tail of OTM calls.
Finally, the Charts Tab (6 months) is below (click to enlarge). The top portion is the stock price, the bottom is the vol (IV30™ - red vs HV20™ - blue). The yellow shaded area at the very bottom is the IV30™ vs. the HV20™ vol difference.
We can see the ETF was as high as $20 (ish) in mid April. The opening Jan calls are betting on a return to that level. It is interesting to note that the Jan '11 17.5 calls are only ~$0.70. I think an interesting trade could be a Jan '11 17.5 call purchase against a Jan '11 20 call sale 2x (i.e. 1 x 2). Safe on the upside to 22.5. The ETF hasn't seen those levels since Sep 2008... Sep 2008... Sep 2008...
Total cost of the 1x2 is ~$0.30. A Jan '10 9 put sale @ $0.15 could cut the cost in half and selling two gets you even. If you believe we might go a lot lower on a market collapse, or you just want to protect against that, you could also buy Dec 8 puts as many times as you sell the Jan puts for $0.07. This scenario if done 2x gets you $0.15 total.
This is trade analysis, not a recommendation.
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