Today's Options Market Update

Markets built on Tuesday's dramatic gains early, encouraged by hints that the war may wind down. President Trump addresses the nation tonight, and domestic crude briefly dropped under $100 per barrel this morning. There's also data to mull, including an upbeat ADP monthly employment gain of 62,000 and February retail sales that climbed 0.6%, topping expectations.

Tuesday's rally wrapped up a disappointing March that saw the S&P 500 Index descend 5%. How much yesterday's action represented hopes for de-escalation and how much was end-of-quarter short-covering and "window dressing"—when fund managers shift positions as a quarter ends—is up for debate. If the move proves technical and crude stays elevated, there's no guarantee better vibes will last. A single Middle East headline could change sentiment.

Major indexes enjoyed their best session in almost a year yesterday, up 2.9% for the S&P 500 Index, after media reports said Iran's president might be willing to end the war. The sectors hardest hit over the last month, including communication services and info tech, both rose more than 4%. Optimism also centered on ideas that China and Pakistan could bring warring parties together, though U.S. and Iranian demands seem far apart. Both volatility and Treasury yields rose slightly ahead of the opening bell, sending mixed signals as stocks climbed.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is lower by ~1 basis point to 4.30%.

The U.S. Dollar Index ($DXY) is lower by 0.60 to 99.36.

WTI Crude Oil (/CL) is lower by 2.47% to $98.88/barrel.

Gold prices have traded in a range of $4,690.00-4,791.50 and were last seen trading higher by ~2.32% to $4,787.00/oz.

Natural Gas prices for March futures have traded in a range of $2.82-2.899 today and were last seen trading lower by 1.80% to $2.832.

Bitcoin (BTC) is higher by ~0.46% over the last 24 hours to $68,551.78 today.

Shares of Cal Maine Foods Inc. (CALM + $4.67 to $83.82) after the egg producer reported fiscal Q3 adjusted EPS of $1.06 ($0.24 beat) on Q3 revenue that decreased 52.95% year-over-year to $666.951M (above the $641.981M expected). Commenting on the quarter, Chief Executive Sherman Miller stated, "By building on the structural strength of our core shell egg platform while expanding specialty eggs, egg products and prepared foods, we are enhancing the resilience and diversification of our business,". Puts are outnumbering calls ~2:1 with the April 17^th 80.00 put being the highest volume contract (volume is 203).

Also trading to the upside this morning is nCino Inc. (NCNO + $1.39 to $16.37) after the financial software provider reported Q4 adjusted EPS of $0.37 ($0.16 beat) on Q4 sales of $149.70M (above the $147.821M expected). Looking ahead, the company guided Q1 sales to a range of $154.5-156.5M (above the $152.654M expected) and FY27 sales to a range of $639-643M (vs. the $639.584M consensus estimate). The company also announced a $100M accelerated share buyback program. Calls are outpacing puts ~10:1 with the April 2^nd 17.50 call leading the way (volume is 791).

New 52-week highs (51 new highs today): Alcoa Corp. (AA + $4.11 to $70.44), Pfizer Inc. (PFE + $0.11 to $28.19), Silicon Labs Inc. (SLAB + $0.74 to $208.89)

Some unusual call activity (better than 2:1 calls over puts) is being seen in Option Care Health Inc. (OPCH - $0.27 to $26.65) which is primarily driven by a 5,000 contract block that was bought on the May 15^th 32.50 call for $0.58 when the bid/ask spread was $0.15 x $0.75 (open interest is 28). We know that this block is a new position based on the open interest figure, and we can assume that the intent is bullish in nature since the trade took place above the midpoint of the bid/ask spread.

Shares of Dow-component Nike Inc. (NKE - $7.49 to $45.33) are under pressure this morning as lagging China sales, lagging tariff headwinds and lackluster guidance overshadow better-than-expected quarterly results. The footwear and athletic apparel reported Q3 EPS of $0.35 ($0.06 beat) on Q3 revenue that was flat year-over-year to $11.28B (above the $11.23B consensus estimate). Footwear sales rose 2% YoY to $7.35B, which was above the $7.2B analysts had expected. Looking ahead, the company said that revenue is expected to be down in the low single digits through the rest of the year, with gains from North America expected to offset declines in Greater China. Calls are outnumbering puts ~3:2 with the April 2^nd 46.00 call being the highest volume contract (volume is 17,413).

Also trading to the downside is RH Inc. (RH - $32.45 to $107.37) after the high-end furniture retailer posted Q4 adjusted EPS of $1.53 ($0.71 miss) on Q4 sales of $842.6M (below the $873.2M expected). Looking ahead, the company said that FY26 sales are expected to come in a range of $3.577-3.715B, which was below the $3.776B analysts were expecting. Calls and puts are trading roughly even with the April 17^th 90.00 put seeing the most action from traders (volume is 1,150).

New 52-week lows (62 new lows today): Automatic Data Processing (ADP - $0.84 to $202.34), Fidelity National Information Services Inc. (FIS - $1.45 to $45.46), Global Payments Inc. (GPN - $0.56 to $66.74)

Some unusual put activity (~40:1 puts over calls) is being seen in Centessa Pharmaceuticals Inc. (CNTA - $0.11 to $39.61) which is primarily being driven by two large blocks that were bought around the same time on the July 17^th 35.00 put – a 3,000 contract block and a 2,000 contract block were bought at the ask price of $0.25 (open interest is 124). We know that these blocks are new position based on the open interest figure and we can assume that the intent is bearish in nature since the trades took place at the ask price.

Frontdoor Inc. (FTDR + $2.56 to $55.42): Option volume is running at over 300x the daily average on this provider of home warranties which is primarily driven by activity on the April 17^th 60.00 call. Volume on this contract is 2,691 versus open interest of 8, so it’s likely that nearly all the volume represents fresh positioning. The majority of the transactions consisted of various-sized blocks that were bought at various times for between $0.25-0.65 each, which suggests bullish intent.

Sun Life Financial Inc. (SLF + $0.92 to $63.48): Option volume is running at over 200x the daily average on this insurance provider which is primarily driven by activity on the April 17^th 65.00 call. Volume on this contract is 1,920 versus open interest of 58, so it’s likely that nearly all the volume represents fresh positioning. The bulk of the transactions consisted of various-sized blocks that were bought at various times for between $0.35-0.65 each, which suggests bullish intent.

Primo Brands Corp. (PRMB + $0.02 to $18.85): Option volume is running at ~14x the daily average on this beverage maker which is primarily being driven by a couple of large blocks that simultaneously traded on the May 15^th expiration earlier this morning:

• 20.00 call (open interest is 1,400): A 10,000 contract block was bought for $0.89 when the bid/ask spread was $0.60 x $0.90.
• 25.00 call (open interest is 67): A 10,000 contract block was sold for $0.06 when the bid/ask spread was $0.05 x $0.35.

We know that these blocks are new positions based on the respective open interest figures, and it appears that a $5.00-wide bull call spread was established for a net debit of $0.83 (x 10K contracts x 100 multiplier, excluding commissions). The positioning suggests that the block trader believes that PRMB will close above the break-even price of $20.83 at expiration.

The Cboe Volatility Index (VIX - 1.54 to 23.71) has been on both sides of the unchanged line today (the intraday range is 23.50-25.30), as equity markets are higher across the board around the midday mark (DJI + 401, SPX + 72, $COMP + 362). VIX option volume is above average today at 755,234 contracts, and calls are outnumbering puts ~4:3 so far today.