Today's Options Market Update

Today's September Producer Price Index (PPI) and retail sales data took a back seat to newer numbers that suggested the economy remains sluggish. Payroll processing firm ADP said job losses averaged 13,500 per week for the four weeks ending November 8, weighing on Wall Street, while retail sales disappointed and PPI was roughly in line with estimates.

PPI rose 0.3%, with core PPI, excluding energy and food prices, up 0.1%. That compared with consensus for a 0.3% headline increase and a 0.2% uptick in core. Retail sales rose 0.2%, well under 0.4% consensus. Major indexes recovered some earlier losses immediately after the data release, possibly on the lower-than-expected core PPI number. Still, the ADP report raises broader questions. "The tone is risk-off this morning," said Cooper Howard, director of fixed income research and strategy at the Schwab Center for Financial Research (SCFR). "The ADP report is raising concerns that the labor market is weaker than expected. PPI was mostly in line with expectations. It doesn't suggest that inflation is turning a corner and will move lower any time soon."

After four straight weekly declines, the S&P 500 index gained Monday and the tech-heavy Nasdaq Composite climbed more than 2.5%. This morning, however, AI leader Nvidia (NVDA) fell 3% after a media outlet, The Information, reported that Meta Platforms (META) is considering AI chips made by Alphabet (GOOGL). Recent weakness in bitcoin, quantum computing, drones, and meme stocks "points to some positioning adjustments underway," said Liz Ann Sonders, chief investment strategist, SCFR, and Kevin Gordon, head of macro research and strategy, SCFR. Monday's rebound, they added, "suggests buy-the-dip has not been squashed, and seasonals are generally supportive of a year-end rally."

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is lower by ~2 basis points to 4.011%.

The U.S. Dollar Index ($DXY) is lower by 0.33 to 99.80.

WTI Crude Oil (/CL) is lower by 2.69% to $57.26/barrel.

Gold prices have traded in a range of $4,143.20-$4,189.00 and were last seen trading higher by ~0.80% to $4,164.00/oz.

Natural Gas prices have traded in a range of $4.267-4.547 today and were last seen trading lower by 5.61% to $4.294.

Bitcoin (BTC) is lower by ~1.48% to $86,963.63 today.

Shares of Abercrombie & Fitch Co. (ANF + $13.72 to $79.33) are gapping up to a six-week high this morning after the retailer reported Q3 adjusted EPS of $2.36 ($0.20 beat) on Q3 revenue of $1.29B (slightly above the $1.282B expected). Looking ahead, the company said that Q4 GAAP EPS is expected to come in a range of $3.40-3.70 (vs. the $3.48 consensus estimate) with Q4 net sales growth expected to increase 4-6% year-over-year (YoY). Calls are outnumbering puts ~3:2 with the December 19^th 60.00 call seeing the most action from traders (volume is 1,550).

Also trading to the upside this morning is Applied Materials Inc. (AMAT + $3.13 to $234.04) after UBS upgraded the semiconductor equipment maker to “Buy” from “Neutral” and bumped their price target on the stock to $285.00 from $250.00. Analysts at UBS said they are “significantly more bullish” on the outlook for wafer fab equipment spending in 2026 and 2027 and believe AMAT “stands out as the largest beneficiary of this DRAM spending surge”. Calls are outnumbering puts ~4:3 with the December 5^th 245.00 call leading the way (volume is 920).

New 52-week highs (146 new highs today): Alphabet Inc. (GOOGL + $2.88 to $321.46), Apple Inc. (AAPL + $2.80 to $278.72), Johnson & Johnson (JNJ + $2.53 to $207.28)

Some unusual call activity (~100:1 calls over puts) is being seen in ACV Auctions Inc. (ACVA + $0.38 to $7.51) as option traders primarily target the December 19^th 7.50 call. Volume on this contract is 1,761 versus open interest of 284, so we know that the volume primarily represents new positioning. The bulk of the transactions consisted of various-sized blocks that were bought around the same time at the ask price of $0.50 each, which suggests bullish intent.

Shares of Burlington Stores Inc. (BURL - $34.52 to $249.95) are gapping down to a four-month low this morning after the retailer reported Q3 adjusted EPS of $1.68 ($0.04 beat) on Q3 revenue of $2.71B (below the $2.739B FactSet consensus estimate). Looking ahead, the company said that Q4 adjusted EPS is expected to come in a range of $4.50-4.70 (vs. the $4.64 consensus estimate) with Q4 total sales expected to increase 7-9% YoY. Puts are outpacing calls ~6:1 which is primarily due to activity on the January 2^nd 220.00 put (volume is 3,450).

Also trading to the downside this morning is Coinbase Global Inc. (COIN - $12.92 to $243.05) after Argus Research downgraded the cryptocurrency exchange to “Hold” from “Buy” without a price target, citing market volatility, higher expenses and valuation concerns. Calls and puts are trading roughly even with the November 28^th 240.00 put garnering the most attention from traders (volume is 4,211).

New 52-week lows (41 new lows today): New England Realty Associates Ltd. (NEN - $1.13 to $67.38), Post Holdings Inc. (POST + $2.26 to $99.29), Willis Lease Finance Corp. (WLFC + $3.58 to $118.63)

Some unusual put activity (~7:1 puts over calls) is being seen in Phillips 66 (PSX + $0.84 to $134.04) as option traders primarily target the February 20^th 120.00 put. Volume on this contract is 3,020 (vs. open interest of 2,030), which nearly entirely consisted of a 1,500 contract block that was bought at the ask price of $3.10 and (around the same time) a 1,500 contract block that was bought for $3.00 when the bid/ask spread was $2.75 x $3.10. Assuming both these blocks are new positions, we can assume the intent is bearish on both blocks given where the trades took place within the bid/ask spread.

Establishment Labs Holdings Inc. (ESTA + $0.73 to $69.88): Option volume is running at ~700x the daily average on this medical technology company which is primarily being driven by a couple of large blocks that simultaneously traded on the February 2026 expiration earlier this morning:

• 65.00 put (open interest is 0): A 5,000 contract block was bought at the ask price of $7.00.
• 55.00 put (open interest is 5): A 5,000 contract block was sold at the bid price of $1.00.

We know that these blocks are new positions based on the respective open interest figures, and it appears that a $10.00-wide bear put spread was established for a net debit of $6.00 (x 5K contracts x 100 multiplier, excluding commissions). The positioning suggests that the block trader believes that ESTA will close below the break-even price of $59.00 at expiration.

Brookfield Renewable Corp. (BEPC + $0.97 to $41.68): Option volume is running at ~15x the daily average on this renewable power producer which is primarily driven by a 1,500 contract block that was bought on the December 19^th 40.00 put for $1.20 when the bid/ask spread was $0.85 x $1.35 (open interest is 74). 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.

Warby Parker Inc. (WRBY + $0.87 to $19.65): Option volume is running at ~8x the daily average on this eyewear maker which is primarily driven by a 4,200 contract block that was bought on the June 2026 15.00 put for $1.45 when the bid/ask spread was $1.10 x $1.50 (open interest is 15). 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.

The Cboe Volatility Index (VIX – 1.23 to 19.29) has been on both sides of the unchanged line today (intraday range is 19.25-21.77), as equity markets are mixed around the midday mark (DJI + 457, SPX + 28, COMP - 17). VIX option volume is below average today at 300,104 contracts, and the activity has been slightly call-biased so far today.