Today's Options Market Update

U.S. stocks are mixed with Financials rebounding and Information Technology giving back some recent gains as choppiness in the markets remain. Financials are recovering somewhat after UBS Group agreed to acquire Credit Suisse for a little over $3.0 billion, while the Fed and five other major central banks took action to increase the availability of liquidity for the financial system. Meanwhile, uncertainty remains regarding if the banking sector turmoil will impact the Fed's monetary policy decision on Wednesday. Treasury yields are higher, and the U.S. dollar is lower. Crude oil prices are lower, and gold is trading modestly higher. Asia finished broadly lower, and Europe is higher.

At 10:45 a.m. ET, the Dow Jones Industrial Average is rising 0.9%, and the S&P 500 Index is gaining 0.5%, while the Nasdaq Composite is dipping 0.1%. WTI crude oil is down $0.88 to $66.05 per barrel, and Brent crude oil is declining $0.90 at $72.07 per barrel. The gold spot price is rising $1.70 to $1,975.20 per ounce, and the Dollar Index is declining 0.3% to 103.38. Natural Gas prices have traded in a range of $2.304-2.427 and were last seen trading lower by $0.028 (or - 1.20%) to $2.310/MMBtu.

Source: Schwab Center for Financial Research

Today’s Bullish Activity

One of today's biggest gainers is Fleetcor Technologies (FLT + $12.05 to $199.25 ) after the global payments company reported that it has entered into a cooperation agreement with one of its long-term shareholders, D.E. Shaw. The agreement involves the appointment of Rahul Gupta to the FLT board of directors, the appointment of another agreed-upon director, and the formation of an ad hoc Strategic Review Committee, all of which are intended to enhance shareholder value. Calls and puts are trading about even in very light volume with the December 15^th 220.00 put seeing the most action (volume is 7).

Also rising is United Rentals (URI + $8.91 to $379.00) though there does not appear to be any news on this equipment rental company. In the past 2 weeks, URI has fallen 22% and is currently below its 50-day and 100-day simple moving average (SMA). Puts are outnumbering calls ~5:4 with the September 15^th 350.00 call getting the most attention from traders (volume is 751).

New 52-week highs (19 new highs today): Daktronics (DAKT + $0.08 to $4.94), Emagin (EMAN + $0.24 to $1.90), Intest (INTT + $0.26 to $17.50), Reneo Pharmaceuticals (RPHM + $0.12 to $5.83)

Notable Call Activity

Some unusual call activity (~3:1 over puts) is being seen in the Vaneck Gold Miners ETF (GDX + $0.24 to $30.83) which is primarily being driven by activity on the April 21^st 34.00 call (open interest is 4,423). Volume on this contract is 36,779 including dozens of mid-sized block trades, most of which were buy orders executed at prices ranging from $0.59 to $0.64. Given the open interest, we know that most of this activity is new positioning, and since most of the trades were executed at or close to various ask prices, it implies bullish sentiment.

Some unusual call activity (~8:1 over puts) is being seen in energy company Occidental Petroleum (OXY + $0.43 to $58.91) which is primarily being driven by activity on the March 24^th 60.00 call (open interest is 3,766). Volume on this contract is 23,869 including a single block trade of 7,577 contracts that was executed at a price of $0.85 when the bid/ask spread was $0.82/$0.85. Given the open interest, we know that this particular block trade was a new position, and since it was executed at the ask price it implies bullish sentiment.

Today’s Bearish Activity

One of today's biggest decliners is PDD Holdings (PDD - $11.84 to $80.11) after the Chinese e-commerce company (formerly known as Pinduoduo) reported Q4 earnings that were +32% y/o/y to $1.321B or $1.21 per share, below the $1.24 per share estimate, on revenue that was +46% y/o/y to $5.77B, also below the $5.90B estimate. Calls are outnumbering puts ~5:4 but the June 16^th 80.00 put is seeing the most action from traders (volume is 6,047).

Also lower today is software hosting company Atlassian (TEAM - $7.95 to $150.30) although there does not appear to be any new news on the company, other than some reminders about several ongoing class action lawsuits that were filed months ago. Calls and puts are trading about even with the May 19^th 180.00 call seeing the most action from traders (volume is 265).

New 52-week lows (74 new lows today): Warby Parker (WRBY - $0.02 to $9.68), Virgin Orbit (VORB - $0.11 to $0.54), Ttec Holdings (TTEC + $0.72 to $36.13), Rivian Automotive (RIVN - $0.15 to $12.86), Sunnova Energy (NOVA + 0.08 to $13.02)

Notable Put Activity

Some unusual put activity (~3:2 over calls) is being seen in chip maker Nvidia (NVDA + $3.25 to $254.16) which is primarily being driven by activity on the March 24^th 240.00 put (open interest is 8,784).

Volume on this contract is 20,920 including dozens of mid-sized block trades, most of which were buy orders executed at prices ranging from $2.43 to $3.10. Given the open interest, we know that most of this activity is new positioning, and since most of the trades were executed at or close to various ask prices, it implies bearish sentiment.

Some unusual put activity (~7:1 over calls) is being seen in the real estate investment trust (REIT) Arbor Realty Trust (ABR + $0.92 to $12.12) which is primarily being driven by activity on the July 21^st 7.50 put (open interest is 1,078). Volume on this contract is 10,030 which is almost entirely made up of a single 10,000 contract block trade executed at $0.35 when the bid/ask spread was $0.30/$0.45. Given the open interest, we know that this was a new position, and since the trade executed below the midpoint of the bid/ask spread, we know that it was a put sale, which typically implies bullish sentiment.

Volume Signals

Vera Bradley (VRA + $0.21 to $6.04): Option volume is running at over 40x the daily average on this women's fashion brand which is primarily being driven by some small and medium-sized activity on the November 17^th 7.50 calls. Volume on this contract is 1,270 (versus open interest of 1), so we know that most of this is new positioning. The entirety of this volume is made up of the following four transactions, which occurred at different times:

• 250 contracts bought at $0.50 when the bid/ask spread was $0.10/$0.50
• 950 contracts sold at $0.50 when the bid/ask spread was $0.50/$1.65
• 50 contracts sold at $0.50 when the bid/ask spread was $0.45/$1.65
• 20 contracts sold at $0.45 when the bid/ask spread was $0.35/$0.70

Given that some of this activity was on the buy side and some of it was on the sell side, there doesn't appear to be a consistent sentiment here.

iShares TIPS Bond ETF (TIP + $0.01 to $108.63): Option volume is running at over 3x the daily average on this fund which is primarily being driven by some spread activity for the April 21^st expiration as follows:

• 112.00 calls (open interest is 803): 1,080 contracts were bought at $0.41 when the bid/ask spread was $0.36/$0.41
• 114.00 calls (open interest is 88): 1,080 contracts were simultaneously sold at $0.16 when the bid/ask spread was $0.15/$0.21

Given the respective open interest levels, we know that these are new positions, and it appears that a call vertical spread was established here for a net debit of $0.25 (x 1,080 contracts x 100 multiplier, excluding commissions), which implies bullish sentiment.

Gauging Volatility

The Cboe Volatility Index (VIX - 1.20 to 24.31) has been on both sides of the unchanged line today (the intraday range is 24.06-28.91) as equity markets are mostly higher around the mid-day mark (DJI + 361, SPX + 34, COMPX + 46). VIX option volume has been above average today (514,747) as the index is currently number 5 on the “Top Volume by Underlying” list. The volume put/call ratio is 0.26 with the highest volume contract being the April 19^th 30.00 call (volume is 67,535 vs. open interest of 128,157).

Interested in receiving notifications of intraday unusual option trades? Follow Schwab’s Managing Director of Trading & Derivatives Randy Frederick on Twitter @RandyAFrederick who will be tweeting unusual options trades as he sees them throughout the day.