Option traders converged on EMC Corporation (NYSE:EMC – 24.01) on Tuesday, especially on the call side of the tape. By the close, the tech concern had seen around 33,000 calls change hands -- about three times its average daily call volume. Meanwhile, around 16,000 EMC puts were exchanged, nearly doubling its typical single-session put activity.

On the call side, traders established new positions at the February 25 strike, which saw call open interest balloon by more than 4,400 contracts overnight. Plus, nearly all of the calls traded at the ask price, hinting at newly bought bullish bets.

By purchasing the calls to open, the buyers expect EMC to rebound atop the $25 level within the next several weeks -- which encompasses the company's turn in the earnings confessional later this month. More specifically, the calls crossed at a volume-weighted average price (VWAP) of $0.40, meaning the buyers will reap a reward if EMC topples the $25.40 level (strike plus VWAP). However, even if EMC remains beneath the strike, the maximum risk is limited to the initial premium paid for the options.

On the other hand, option bears picked up February 24 puts, where nearly 6,200 contracts traded -- mostly at the ask price. What's more, the bulk of the contracts translated into new open interest, underscoring our theory of buy-to-open activity. By buying the puts at a VWAP of $0.81, the traders are looking for EMC to breach the $23.19 level (strike minus VWAP) by February options expiration. Again, like the call buyers, the most the speculators can lose is the initial premium paid.

On the charts, the shares of EMC have followed the broader equities market into the black this morning, paring yesterday's downgrade-induced deficit. Furthermore, the stock is trading higher, despite a price-target cut to $28.50 from $30 at UBS.