Shares of Ambac Financial Group Inc (ABK) are on the move today. The stock is up 20% and option traders have taken notice. Here is what I see...

We still have well over an hour to go in the session but the stock has already traded over 27 million shares. That's the highest daily volume since November 20. The shares hit their annual low on November 19 and the 20 saw a snap back rally.

Today's action appears to be drawing in some option activity. A look to the front-month options shows that over 10,000 contracts of the January 2.50 calls have traded today. That is the lowest strike listed but still well out of the money. It looks like many of the trades went off at a nickel so the volume isn't necessarily high dollar activity.

In order to drill down on the recent activity, I pulled the 30-minute chart below. It shows the intraday action for the last 15 days and highlights the volatility.

Charts Courtesy of Thomson Financial

In just over a week, the shares have gone from lows near 1.12 to the current price near 1.60 - a gain of over 40%. Something that might be adding to the volatile nature is short interest. According to data collected by our Quantified Analysis group, 20% of the stock's float is sold short.