LeBron fever is in full bloom in the options market.

Interest has exploded in Madison Square Garden options as LeBron James, the premier free agent in the National Basketball Association, contemplates signing his next contract with a number of teams, one of which is the New York Knicks, owned by MSG.

James is expected to announce his decision in an hour-long television special Thursday evening. While sports enthusiasts are taking bets on the Intrade prediction market as to where James might end up, in the financial markets traders have turned to MSG options, with call options action at 36 times the expected daily volume, according to Schaeffer's Investment Research.

That's the only pure bet there is for LeBron James, that's why it's moving, said Jon Najarian, co-founder of Optionmonster.com. They are not really looking for it to run in either direction, there's still more bullish speculation than there is bearish.

Since the free agency signing period began on July 1, shares of Madison Square Garden have risen 4.7 percent to $20.60. The stock rose on Wednesday on speculation the Knicks might land James, although the stock fell 4.5 percent on Thursday.

Madison Square Garden had seen roughly 13,000 call trades on Thursday, about 36 times its expected single-session call volume, said Andrea Kramer of Schaeffer's Investment Research. Call options give the purchaser the right to buy a stock at a given price by a specific date.

Most of the volume this week is in the front-month July series of options, suggesting traders were making short-term bets, she said.

Intrade's prediction markets put the highest odds on James signing with the Miami Heat, at 69 percent. Both the Knicks and his current team, the Cleveland Cavaliers, are trading around 20 percent.

The superstar small forward averaged 29.1 points, about 9 rebounds and 7.6 assists per game during his 2010 season with the Cavaliers.

(Reporting by Matthew Lynley; Editing by Leslie Adler)