Today's Options Market Update

Stocks initially fell in early trading with tech under increasing pressure after a key inflation reading came in slightly warmer than expected and fourth quarter economic growth slowed substantially. December Personal Consumption Expenditures (PCE) prices rose 0.4% month over month, above the consensus of 0.3% and November's 0.2%. Core PCE excluding food and energy costs also rose 0.4%, in line with consensus and also above the 0.2% November level. The government's first estimate for gross domestic product (GDP) landed at just 1.4% when Wall Street had expected 3%.

"The government shutdown appeared to be the key driver of the weaker-than-expected GDP report," said Collin Martin, head of fixed income research and strategy at the Schwab Center for Financial Research. "Since its impact is tough to forecast, the markets appear to be taking it in stride given that personal consumption came in-line with expectations for the quarter. Core PCE came in a bit hot on both a month-over-month and year-over-year basis, contrasting with last week's softer CPI report."

However, the equity markets stagged a mid-morning comeback as investors digested a Supreme Court ruling on President Trump's tariffs. The Court ruled that President Trump could not impose sweeping tariffs under the International Economic Emergency Powers Act. This appeared to be viewed as slightly bullish by market participants, but the decision does not affect all tariffs or prevent the administration from attempting alternative restrictions on trade. Finally, the decision did not address the issue of potential refunds, which could likely have an impact on the markets.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is higher by nearly 2 basis points to 4.09%.

The U.S. Dollar Index ($DXY) is lower by 0.11 to 97.82.

WTI Crude Oil (/CL) is higher by 0.14% to $66.49/barrel.

Gold prices have traded in a range of $4,999.30-$5,094.30 and were last seen trading higher by ~1.87% to $5,090.90/oz.

Natural Gas prices have traded in a range of $2.95-3.16 today and were last seen trading higher by 4.27% to $3.12.

Bitcoin (BTC) is higher by ~0.96% to $67,574.00 today.

Shares of AppLovin Corp. (APP + $10.28 to $422.01) are rising this morning after media reports that the mobile technology company plans to introduce its own social media platform after its bid for TikTok failed. Calls are outpacing puts ~4:1 with the April 2nd 500.00 call being the highest volume contract (volume is 399).

Also trading to the upside this morning is Opendoor Technologies Inc. (OPEN + $0.70 to $5.35) after the online residential real estate firm reported fiscal-year Q4 adjusted operating earnings of $43 million, below the FactSet estimate of $49.5 million, but revenue of $736 million that easily topped analysts' estimates of $594 million. Calls are outnumbering puts ~4:1 but the February 20th 5.00 put is leading the way (volume is 1,013).

New 52-week highs (84 new highs today): Advanced Energy Industries Inc. (AEIS + $8.94 to $329.58), GE Aerospace (GE + $5.98 to $340.72), Ross Stores Inc. (ROST + $1.47 to $201.85)

Some unusual call activity (~7:1 calls over puts) is being seen in AXT Inc. (AXTI + $4.67 to $28.48) which is primarily driven by activity on the March 20th 40.00 call, notably a 1,080 block that was bought for $2.00. Open interest is 161 so we know that this block primarily represents fresh positioning with bullish intent. Part of the action may be as a result of the material science company's Q4 earnings results late yesterday where it posted a smaller-than-expected loss and better-than-expected Q1 guidance.

Shares of Grail Inc. (GRAL - $49.03 to $52.50) are gapping lower this morning after the biotechnology company said its multi-cancer screening test Galleri didn't lead to a statistically significant reduction in stage 3 and 4 cancer in a large trial. This news is overshadowing the company's earnings results where it posted a smaller-than-expected Q4 loss. Calls and puts are running near the same pace with the February 20th 26.75 put being the highest volume contract (volume is 194).

Also trading to the downside today is Akamai Technologies Inc. (AKAM - $11.79 to $97.80) after the cybersecurity and cloud company reported Q4 earnings and revenue that topped the Street's estimates but issued lower-than-expected full-year earnings guidance. Puts are outnumbering calls ~2:1 with the August 21st 70.00 put being the highest volume contract (volume is 100).

New 52-week lows (73 new lows today): Check Point Software Technologies Ltd. (CHKP + $3.08 to $162.13), Paychex Inc. (PAYX - $0.69 to $91.65), Workday Inc. (WDAY + $1.49 to $141.51)

Some unusual put activity is being seen in Solaris Energy Infrastructure Inc. (SEI - $2.24 to $47.74) which is primarily driven by a 1,540-contract block that was bought on the March 20th 45.00 put for $4.81. Open interest is 761 so we can assume that this block represents some fresh positioning and that the intent is bearish in nature toward this energy equipment and solutions company.

Select Medical Holdings Corporation (SEM - $0.99 to $15.09): Option volume is running at ~320x the daily average on this healthcare company which is primarily being driven by a 999-contract block that traded on the June 18th 15.00 put (open interest is 46). This block was bought for $0.60 when the bid/ask spread was $0.10 x $0.75. Based on the open interest figure and the fact that the trade took place above the midpoint of the bid/ask spread we can assume we have fresh positioning here with bearish intent.

Innovative Industrial Properties Inc. (IIPR - $1.23 to $45.13): Option volume is running at ~55x the daily average on this cannabis real estate investment trust (REIT) as option traders primarily target the March 20th 40.00 put. Volume on this contract is 5,537 versus open interest of 58, so we know we have new positioning. The majority of the transactions consisted of various-sized blocks that were bought around the same time for $0.80, which suggests bearish intent.

Progress Software Corporation (PRGS + $4.47 to $40.89): Option volume is running at ~33x the daily average on this business applications software maker which is primarily driven by a 1,000-contract block that traded on the March 20th 45.00 call for $0.74 when the bid/ask spread was $0.45 x $0.85 (open interest is 390). 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.

The Cboe Volatility Index (VIX - 0.08 to 20.15) has been on both sides of the unchanged line today (the intraday range is 18.77-21.21), as equity markets are higher around the midday mark (DJI + 37, SPX + 29, COMP + 158). VIX option volume is above average today at 455,195 contracts, and calls are outpacing puts ~3:1 so far today.