Today's Options Market Update

With a day to go before critical jobs data, investors hunkered down as they mulled disappointing retail sales data and mixed results from Coca-Cola (KO). Barring any unexpected developments, trading might be slow today with participants less willing to take large new positions ahead of the jobs report. That said, chip stocks, including Nvidia (NVDA) and Broadcom (AVGO), rose overnight, perhaps a sign the recent tech rally has more room to run.

December's retail sales data aren't likely to provide a lift, however, coming in unchanged from the prior month and below estimates for 0.4% growth. Stocks edged lower after the report and the 10-year Treasury note yield slipped to 4.16%, a nearly one-month low. Retail sales were a bit of a disappointment, missing across the board in terms of expectations, plus slight downward revisions to last month. The last couple of retail sales reports have been relatively strong though, suggesting the upper half of the 'K economy' is holding up well. Today's report is only one data point, and we need a couple more reports to see if there is any change in trend, which has been signaling healthy consumer spending.

Monday saw seven of 11 S&P 500 sectors climb. Tech led the way, extending its rebound thanks partly to Oracle (ORCL) getting an analyst upgrade that eased some AI concerns. Assessing the possible impact of today's data, markets have largely been OK with poor sentiment readings via consumer confidence as long as upper income earners are continuing to spend, so we'll want to continue to monitor this, along with the job market and wage growth, in light of last week's soft labor market data.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is lower by ~5 basis point to 4.143%.

The U.S. Dollar Index ($DXY) is lower by 0.04 to 96.77.

WTI Crude Oil (/CL) is essentially flat at $64.35/barrel.

Gold prices have traded in a range of $5,011.00-5,102.70 and were last seen trading lower by ~0.32% to $5,063.20/oz.

Natural Gas prices for March futures have traded in a range of $3.061-3.182 today and were last seen trading higher by 0.76% to $3.162.

Bitcoin (BTC) is lower by ~1.88% over the last 24 hours to $68,843.26 today.

Shares of Datadog Inc. (DDOG + $18.22 to $132.23) are moving higher this morning after the data analytics platform reported Q4 adjusted earnings of $0.59 per share ($0.04 beat) on Q4 revenue that increased 29% year-over-year (YoY) to $953M (above the $919M expected). Looking ahead, the company said that Q1 EPS is expected to come in a range of $0.49-0.51 (below the $0.53 consensus estimate) and Q1 revenue to come in a range of $951-961M (above the $936M expected). Calls are outnumbering puts ~3:2, but the April 17^th 95.00 put is seeing the most action from traders (volume is 10,123).

Also trading to the upside this morning is Credo Technology Group Inc. (CRDO + $12.90 to $136.31) after the provider of high-speed connectivity solutions provided strong preliminary Q3 revenue guidance last night after the bell. The company said that it expects fiscal Q3 revenue to come in a range of $404-408M versus its prior guidance of $335-345M. CRDO is tentatively scheduled to report Q3 earnings on March 2nd after the market close. Calls and puts are trading roughly even with the March 20^th 80.00 put being the highest volume contract (volume is 7,325).

New 52-week highs (151 new highs today): AstraZeneca PLC (AZN + $5.23 to $193.24), Cisco Systems Inc. (CSCO + $1.11 to $87.89), Marriot Inc. (MAR + $28.88 to $360.09)

Some unusual call activity (~100:1 calls over puts) is being seen in work management software maker Asana Inc. (ASAN + $0.14 to $8.36) as option traders primarily target the February 13^th 9.00 call. Volume on this contract is 31,743 versus open interest of 92, so it’s likely that nearly all the volume represents new positioning. The majority of the transactions consisted of various-sized blocks that were bought at various times for between $0.11-0.20 each, which suggests bullish intent. ASAN is tentatively scheduled to report Q4 earnings on March 2^nd after the bell, so this positioning doesn’t capture the potential impact of that event.

Joining the 52-week low club this morning is S&P Global Inc. (SPGI - $31.23 to $412.96) after the provider of credit ratings, benchmarks, analytics, and workflow solutions reported Q4 adjusted EPS of $4.30 ($0.03 miss) on Q4 revenue that increased 9% YoY to $3.92B (slightly above the $3.91B consensus estimate). Looking ahead, the company guided full-year 2026 (FY26) adjusted EPS to a range of $19.40-19.65 (below the $20.02 consensus estimate), with FY26 revenue expected to come in a range of $16.34-16.655B. Puts are outnumbering calls ~3:2 with the February 13^th 400.00 put being the highest volume contract (volume is 1,395).

Also trading to the downside today is BP PLC (BP - $2.49 to $36.73) after the integrated energy company reported Q4 adjusted earnings of $0.50 per share ($0.01 beat) on Q4 revenue that increased 3.56% YoY to $47.383B (below the $49.363B expected). Looking ahead, BP said that it is suspending its quarterly share buyback program and reducing 2026 capital expenditures to the lower end of its guidance range to help shore up the company’s balance sheet. Calls and puts are trading roughly even with the April 20^th 41.00 call seeing the most action from traders (volume is 823).

New 52-week lows (50 new lows today): Automatic Data Processing Inc. (ADP - $2.15 to $266.23), FactSet Research systems Inc. (FDS - $2.07 to $201.15), Morningstar Inc. (MORN - $3.15 to $160.55)

Some unusual put activity (~15:1 puts over calls) is being seen in The Bank of New York Mellon Corp. (BK - $1.24 to $126.38) as option traders primarily target the June 18^th 110.00 put. Volume on this contract is 4,831 versus open interest of 406, so we know that the volume primarily represents new positioning. The majority of the transactions consisted of various-sized blocks that were bought at various times for between $2.60-2.75 each, which suggests bearish intent.

Huron Consulting Group Inc. (HURN - $3.21 to $150.85): Option volume is running at ~82x the daily average on this provider of consultancy and managed services which is primarily driven by a 1,500 contract block that was bought on the March 20^th 145.00 put for $5.80 when the bid/ask spread was $4.30 x $6.40 (open interest is 1). We know that this block is a new position based on the open interest figure, and we can assume that the intent is bearish in nature since the trade took place above the midpoint of the bid/ask spread.

Sally Beauty Holdings Inc. (SBH - $1.22 to $15.79): Option volume is running at ~13x the daily average on this beauty products retailer which is primarily driven by a 2,000 contract block that was bought on the March 20^th 17.50 call for $1.00 when the bid/ask spread was $0.80 x $1.15 (open interest is 389). 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.

STMicroelectronics N.V. (STM + $1.37 to $33.88): Option volume is running at ~3x the daily average on this chip maker which is primarily being driven by a couple of large blocks that simultaneously traded on the March 20^th expiration earlier this morning:

• 35.00 call (open interest is 130): A 1,740 contract block was bought at the ask price of $1.25.
• 39.00 call (open interest is 0): A 1,740 contract block was sold for $0.45 when the bid/ask spread was $0.00 x $1.85.

We know that these blocks are new positions based on the respective open interest figures, and it appears that a $4.00-wide bull call spread was established for a net debit of $0.80 (x 1,740 contracts x 100 multiplier, excluding commissions). The positioning suggests that the block trader believes that STM will close above the break-even price of $35.80 at expiration.

The Cboe Volatility Index (VIX + 0.04 to 17.40) has been on both sides of the unchanged line today (the intraday range is 17.14-17.85), as equity markets are modestly higher around the midday mark (DJI + 265, SPX + 8, $COMP + 5). VIX option volume is above average today at 427,220 contracts, and calls are outnumbering puts roughly 3:2 so far today.