Today's Options Market Update

Rotation Out of Tech Rolls Along as Broadcom Dips

December 12, 2025 Joe Mazzola

Tech saw more pressure early despite solid results from chip giant Broadcom as rotation out of that sector continued. Yields rose, possibly a drag after Thursday's record highs.

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Judging from the calendar, this could be a day Wall Street takes a breather from its recent feverish pace. Major earnings and data are scarce, the weekend beckons, and investors increasingly look ahead to next Tuesday's jobs report. Broadcom (AVGO) dominates the scenery after results and guidance late Thursday topped estimates, though shares dropped and took the Nasdaq down in early trading.

Investors' early reaction to Broadcom suggests the AI crowd is getting tough to please. Arguably, the chip maker's earnings exceeded most expectations, but shares fell nearly 6% ahead of the open. Broadcom had rallied 200% from its April low through yesterday's close, meaning good news may already be priced in. Checking quarterly numbers, Broadcom's revenue rose 28.2% year over year to $18.02 billion, easily topping consensus of $17.47 billion, and it sees positive momentum continuing. However, analysts on the company's call appeared skeptical about the forecasts, Barron's reported. Broadcom's performance so far today following Oracle's (ORCL) slide yesterday fits into theories that investors are shifting their focus beyond tech amid growing AI spending worries.

Major indexes had a mixed outing Thursday. The Dow Jones Industrial Average and S&P 500 index posted record-high closes while the Nasdaq wilted. Tech's weakness reinforces ideas that rotation continues out of AI names and into sectors like small caps and financials, something to track today amid rising Treasury yields that can hurt smaller stocks. "The combination of the Fed's updated dot plot—which included higher GDP growth and slightly lower inflation expectations—coupled with Oracle's increased CapEx spending, appears to be contributing to continued money flow towards more cyclical, non-tech areas of the market," said Nathan Peterson, director of derivatives research and strategy, Schwab Center for Financial Research (SCFR).

Source: Schwab Center for Financial Research

Morning Rush

The 10-year U.S. Treasury yield (TNX) is higher by 4 bps 4.19%.

The U.S. Dollar Index ($DXY) is unchanged at 98.35.

The CBOE Volatility Index^® (VIX) is up by 5.80% to 15.75.

WTI Crude Oil (/CL) is unchanged at $57.56/barrel.

Bitcoin (BTC) is falling by 1.67% to $90,435.

Ethereum (ETH) is down by 4.64% at $3,080.

Today's Bullish Activity

Shares of Tilray Brands Inc. (TLRY + $2.07 to $10.50) are up over 25.00%, in morning trading, after it was reported that President Trump is planning to sign an executive order relaxing federal regulations on marijuana. It was reported by Axios that President Trump is set to instruct federal agencies to reclassify marijuana as a Schedule III drug, which would result in cannabis companies being subjected to different tax regulations. The reclassification would place marijuana in the same category as drugs like steroids and Tylenol with codeine. This would make it easier to buy and sell cannabis. The reclassification is widely expected to take place early next year, but the news has yet to be confirmed by the White House.

For those who follow TLRY stock and are wondering why the share price, outside of today's 25% move, seems much higher than a few weeks back, the shares underwent a 10/1 reverse stock split back on December 2nd. This also explains the 10/100 contract expirations you see on the thinkorswim^® platform.

Option trading in TLRY currently stands at 66,746 contracts, 44x the average daily volume with calls outpacing nearly 3:1. Leading the way are the following trades, expirations, and strikes:

December 12th, 2025, 11.00 put accounted for 2,925 contracts; open interest is zero contracts.
December 12th, 2025, 12.00 call accounted for 2,644 contracts; open interest is 147 contracts.
December 12th, 2025, 9.00 put accounted for 2,445 contracts; open interest is 14 contracts.

New 52-week highs (349 new highs today): Rivian Automotive Inc. (RIVN + $2.58 to $19.01), Planet Labs (PL + $0.36 to $17.83), Discovery Inc (WBD + $0.34 to $29.83), Bank of America Corp. (BAC + $0.16 to $54.72)

Notable Call Activity

Unusual call activity is noted today in Canopy Growth Corp. (CGC + $0.40 to $1.53), as call volume currently stands at 102,879 contracts, 36x the average daily volume and 25x the put volume. Activity is greatest in the December 19th, 2025, expiration month, where over 36,000 contracts have traded, mostly on the buy side. The 1.50 strike has seen volume more than 6,700 contracts with prices ranging from $0.20 to $0.27. Shares of CGC are up by nearly 40% today following reports from numerous media outlets that President Trump is set to instruct federal agencies to reclassify marijuana as a Schedule III drug, which would subject Canopy Growth to different tax regulations. This could attract more investments into the sector, providing companies, such as Canopy, with easier access to capital.

Another name exhibiting unusual activity today is Microchip Technology (MCHP + $1.92 to $67.14), as call volume has spiked to 28,762 contracts in morning trading, 17x the average volume. Traders are targeting the March 20th, 2025, expiration month and appear to be selling the 57.50 strike calls through a large single block trade of 28,000 contracts. The sale price of $12.82 was slightly below the mid-price. We know this to represent new positioning based upon the open interest of 343 contracts (suggesting neutral to bearish intent). Shares of MCHP have rallied nearly 40% since late November, so traders may be fading the move.

Today's Bearish Activity

Shares of Broadcom Inc. (AVGO - $42.33 to $351.00) are down over 10% today, the shares worst decline in 10 months, even after the company beat on sales and earnings expectations, as it was the sales outlook for the AI market that failed to meet investors' expectations. Broadcom reported fourth quarter results that topped expectations for adjusted EPS ($1.95) and adjusted revenue ($18.02 billion). The company even announced a 10% increase in its dividend but given the gains to the share price this year of over 70%, investors may have expected perfection. That's where the gross margins came under scrutiny, as did the fact that CEO Tan held off on giving an annual AI revenue forecast, saying it was "a moving target" and that he would rather not give guidance on what 2026 is going to look like precisely (per Bloomberg).

Option trading in AVGO currently stands at 1,123,153 contracts in morning trading, on pace for 8x the daily average, with calls outpacing puts nearly 2:1. Leading the way are the following trades, expirations, and strikes:

December 12th, 2025, 365.00 call accounted for 42,571 contracts; open interest is 472 contracts.
December 12th, 2025, 380.00 call accounted for 47,203 contracts; open interest is 1,586 contracts.
December 12th, 2025, 360.00 put accounted for 39,573 contracts; open interest is 11,465 contracts.

New 52-week lows (33 new lows today): Cracker Barrel (CBRL - $1.36 to $25.64), Kosmos Energy Ltd. (KOS - $0.05 to $1.02), The Campbell's Company (CPB - $0.49 to $27.98), Lakeland Industrial Inc. (LAKE - $6.55 to $8.46)

Notable Put Activity

There is unusual put activity today in Solaris Energy Infrastructure (SEI - $7.61 to $46.46). This activity equates to over 13,958 put contracts, 140x average daily put volume and 13x today's call volume. Most of the volume can be attributed to multiple block trades in the December 19th, 2025, expiration, specifically at the 50.00 strike put. While trading has been two-sided, most of the activity has been on the sell side, with prices ranging from $2.50 to $3.00 each. There was only 82 contracts of open interest, so these trades represent new positions (suggesting neutral to bullish intent). Shares of SEI are down over 13% today, representing their biggest intraday drop in six months.

Unusual activity has also been detected in Ball Corp. (BALL + $1.25 to $50.47), as put volume stands at 6,675 contracts in morning trading, 78x average daily volume and 10x the call volume. Most of the volume (4,800 contracts)is in the December 19th , 2026, expiration month where traders appear to be closing out short put positions at the 40.00, 45.00, and 50.00 strikes. This is likely due to the $4.00 rally in BALL shares since Wednesday.

Gauging Volatility

The Cboe Volatility Index (VIX - 0.49 to 15.28) has been on both sides of the unchanged line today (the intraday range is 15.26-16.88), as equity markets are mixed around the midday mark (DJI + 611, SPX + 3, $COMP - 126). VIX option volume is average today at 520,204 contracts, and the activity has been modestly call-biased so far today.

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