Today's Options Market Update

Despite another round of solid corporate earnings, stocks stepped back early Tuesday following two straight higher sessions. Investors kept an eye on China after Bloomberg reported today that Beijing told airlines not to accept any Boeing (BA) deliveries or U.S. aircraft gear. Treasury yields also ticked higher, muting earnings-related enthusiasm as investors remain focused on Treasuries and the dollar after both suffered tariff-related head colds recently.

Key data ahead include March retail sales tomorrow and March housing starts and building permits Thursday. This so-called "hard data" is eagerly awaited to see if slipping "soft" measures like sentiment are translating into a real-world economic retreat. Analysts expect a large monthly jump of 1.3% in retail sales, perhaps reflecting people buying ahead of what they thought might be tariff-related inflation.

Retail sales "should provide some helpful evidence of the pace of consumer spending," Federal Reserve Governor Christopher Waller said Monday, adding that weak readings earlier this year may have reflected seasonal factors like harsh winter weather. Waller cheered the market and put Treasury yields under slight pressure Monday by hinting the Fed might need to cut rates under two different tariff scenarios. Still, futures trading indicates only slight chances of rates easing at the approaching May Fed meeting.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is lower by ~2 basis points to 4.347%.

The U.S. Dollar Index ($DXY) is higher by 0.34 at 99.98.

WTI Crude Oil (/CL) is lower by 0.41% to $61.28/barrel.

Gold prices have traded in a range of $3,225.50-$3,249.00, last seen trading higher by 0.33% to $3,237.40/oz.

Natural Gas prices have traded in a range of $3.216-3.378 and were last seen trading lower by 2.14% to $3.254.

Bitcoin (BTC) is higher by ~0.74% to $85,242.70.

Shares of Bank of America Corp. (BAC + $1.48 to $38.15) are trading higher this morning after the financial services provider reported Q1 earnings of $0.90 per share ($0.08 beat) on revenue that rose 6.0% year-over-year to $27.37B (above the $26.97B FactSet consensus estimate). The company's Q1 net interest income (NII) increased 3% year-over-year to $14.4B while Q1 provisions for credit losses increased to $1.50B from $1.3B in the year-ago quarter. Calls are outnumbering puts ~2:1 with the May 16^th 42.00 call being the highest volume contract (volume is 24,271).

Also trading to the upside this morning is Citigroup Inc. (C + $1.19 to $64.41) after the diversified financial services provider reported Q1 earnings of $1.96 per share ($0.11 beat) on revenue that rose 2.8% year-over-year to $21.60B (above the $21.26B FactSet consensus estimate). The company's Q1 net interest income (NII) increased 4% year-over-year to $14.4B while Q1 provisions for credit losses increased to $22.8B from $21.8B in the year-ago quarter. Calls are outnumbering puts ~5:4 with the April 17^th 65.00 call being the highest volume contract (volume is 4,881).

New 52-week highs (36 new highs today): Agnico-Eagle Mines Ltd. (AEM + $1.25 to $119.64), Casey's General Stores Inc. (CASY + $3.79 to $464.57), Royal Gold Inc. (RGLD + $1.37 to $183.17)

Some unusual call activity (~8:1 calls over puts) is being seen in USA Rare Earth Inc. (USAR + $2.95 to $14.70) which is primarily being driven by activity on the May 16^th 20.00 call. Volume on this contract is 1,796 versus open interest of 853, so we know that we have some fresh positioning here. The bulk of the transactions consisted of various-sized blocks that were bought at various times for between $0.85-1.40 each, which suggests bullish intent.

Shares of United Health Services Inc. (UHS - $1.26 to $177.56) are trading lower this morning after Baird downgraded the operator of acute care hospitals to "Neutral" from "Outperform" and cut their price target on the stock to $224.00 from $274.00. Analysts at Baird see minimal incremental buyers of stocks in the managed care and healthcare facilities group until policy overhang clears. Option volume is tepid with the April 17^th 165.00 call being the highest volume contract (volume is 4).

Also trading to the downside this morning is Howmet Aerospace Inc. (HWM - $2.16 to $125.30) after Wells Fargo downgraded the aerospace & defense company to "Equal Weight" from "Overweight" and cut their price target on the stock to $118.00 from $132.00, citing global economic slowdown concerns. Calls are outnumbering calls ~5:2 with the April 17^th 127.00 call leading the way (volume is 51).

New 52-week lows (48 new lows today): Adapthealth Corp. (AHCO - $0.10 to $8.12), CONMED Corp. (CNMD - $1.21 to $49.77), Papa John's International Inc. (PZZA - $0.38 to $30.63)

Some unusual put activity (~450:1 puts over calls) is being seen in marine transportation company Matson Inc. (MATX - $1.10 to $101.44) which is primarily being driven by a 1,200 contract block that was sold on the May 16^th 85.00 put for $0.90 when the bid/ask spread was $0.05 x $4.90 (open interest is 20). We know that this block is a new position based on the open interest figure, and the put sale suggests that the block trader believes MATX will remain above the $85.00 price level and/or is comfortable taking a long 120,000 share position in the stock at an effective purchase price of $84.10 if MATX closes below $85.00 at expiration.

Service Corporation International (SCI + $0.03 to $20.32): Option volume is running at ~35x the daily average on this provider of deathcare products and services which is primarily being driven by a couple of large blocks (732, 732) that were bought on the May 16^th 75.00 put for $2.10 when the bid/ask spread was $1.75 x $2.40 (open interest is 11). We know that these blocks are new positions based on the open interest figure, and we can assume the intent is bearish in nature since the trades took place above the midpoint of the bid/ask spread.

The J.M. Smucker Company (SJM - $0.94 to $116.96): Option volume is running at ~15x the daily average on this food maker which is primarily being driven by a 3,000 contract block that was bought on the May 16^th 115.00 put for $2.65 when the bid/ask spread was $2.50 x $2.75 (open interest is 142). We know that this block is a new position based on the open interest figure, and we can assume the intent is bearish in nature since the trade took place above the midpoint of the bid/ask spread.

ADMA Biologics Inc. (ADMA + $0.79 to $21.70): Option volume is running at ~9x the daily average on this biopharmaceutical company which is primarily being driven by a 3,000 contract block that was bought on the May 16^th 22.00 call for $1.71 when the bid/ask spread was $1.55 x $1.75 (open interest is 464). We know that this block is a new position based on the open interest figure, and we can assume the intent is bullish in nature since the trade took place above the midpoint of the bid/ask spread.

The Cboe Volatility Index (VIX - 2.08 to 28.81) has been on both sides of the unchanged line today (intraday range is 28.29-31.45), as equity markets are modestly higher around the midday mark (DJI + 106, SPX + 22, COMPX + 84). VIX option volume is above average today at 739,579 which puts the index at the #6 spot on the "Top Volume by Underlying" list. The volume put/call ratio is currently 0.62 with the highest volume contract being the May 21^st 75.00 call (volume is 68,124 vs. open interest of 282,138).