Today's Options Market Update

Wall Street mounted a dramatic comeback to start the new week on President Trump's post that the U.S. and Iran are having "very good and productive conversations" and he's postponing threatened strikes against the country's power plants by five days. The news at 7 a.m. ET reversed nearly 1% overnight losses and turned them quickly into 2% gains, while crude oil fell a swift 8%. In a follow-up post, Trump said the U.S. is "getting very close to meeting our objectives" and is "very intent on making a deal with Iran."

Today's quick pivot from red light to green light on two short Trump posts despite continued closure of the vital Strait of Hormuz highlight how markets continue focusing almost solely on this one geopolitical crisis. The market psychology appears to be hijacked by the Iran war, as stocks are generally moving inverse of oil prices on a day-to-day basis.

Friday saw major indexes crater to six-month lows in a fourth straight week of losses as the small-cap Russell 2000® Index (RUT) entered correction territory, down more than 10% from its recent high close. Only a flutter of buying in the very last moments prevented a 2% daily decline for the S&P 500 Index. The main investor focus appears to be 'how long' the war will last, and 'how high and for how long' oil prices remain elevated. That depends on how long the Strait remains closed, and investors will monitor for any signs of ships going through after Trump's statements today. However, Iran's news agency soon denied that talks have occurred and said, "there will be no peace in the energy markets," CNBC reported.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is lower by ~5 basis point to 4.342%.

The U.S. Dollar Index ($DXY) is lower by 0.63 to 99.02.

WTI Crude Oil (/CL) is lower by 8.59% to $89.79/barrel.

Gold prices have traded in a range of $4,100.00-4,537.10 and were last seen trading lower by ~1.99% to $4,483.90/oz.

Natural Gas prices for March futures have traded in a range of $2.923-3.153 today and were last seen trading lower by 4.85% to $2.945.

Bitcoin (BTC) is higher by ~4.95% over the last 24 hours to $71,5279.70 today.

Shares of MongoDB Inc. (MDB + $17.08 to $278.24) are moving higher this morning after Mizuho upgraded the general purpose database platform to “Outperform” from “Neutral” and raised their price target on the stock to $325.00 from $290.00. Analysts at Mizuho cited improving growth trends, rising customer additions and sustained demand tied to AI workloads. Calls are outnumbering puts ~4:1 with the March 27^th 280.00 call being the highest volume contract (volume is 481).

Also trading to the upside this morning is AeroVironment Inc. (AVAV + $6.51 to $204.23) after Raymond James upgraded the drone maker to “Market Perform” from “Underperform” without a price target, citing valuation. Raymond James analyst Brian Gesuale acknowledged that the company still faces competitive threats but believes the recent multiple compression and negative analyst estimate revisions create a balanced risk/reward set-up for the stock at current levels. Calls are outnumbering puts ~5:1 with the March 27^th 240.00 call leading the way (volume is 326).

New 52-week highs (29 new highs today): Camtek Ltd. (CAMT + $10.72 to $176.67), GE Vernova Inc. (GEV + $58.92 to $909.99), Mastec Inc. (MTZ + $18.53 to $319.11)

Some unusual call activity (~2:1 calls over puts) is being seen in Vale S.A. (VALE + $0.71 to $14.76) which is primarily being driven by activity on the March 27^th 15.50 call. Volume on this contract is 13,717 versus open interest of 1,291, so we know that the volume primarily represents fresh positioning. The bulk of the transactions consisted of various-sized blocks that were bought at various times for between $0.08-0.10 each, which suggests bullish intent.

Shares of Thompson Reuters Corp. (TRI - $3.16 to $90.28) are moving lower this morning after Wells Fargo downgraded the data services provider to “Equal Weight” from “Overweight” and cut their price target on the stock to $95.00 from $120.00. Wells Fargo analyst Jason Haas said that his channel checks show increasing competition in legal research, though he does not expect “meaningful displacement risk” from AI. Calls and puts are trading roughly even with the April 17^th 100.00 call bring the highest volume contract (volume is 144).

Also trading to the downside is Crown Castle Inc. (CCI - $0.77 to $81.59) after Wells Fargo downgraded the wireless real estate investment trust (REIT) to “Equal Weight” from “Overweight” and trimmed their price target on the stock to $85.00 from $90.00, citing growth concerns. Calls and puts are trading roughly even with the July 17^th 80.00 put seeing the most action from traders (volume is 62).

New 52-week lows (86 new lows today): Abbott Laboratories Inc. (ABT + $0.06 to $105.52), General Mills Inc. (GIS + $0.42 to $37.43), SBA Communications Inc. (SBAC - $3.18 to $170.97)

Some unusual put activity (~3:1 puts over calls) is being seen in Chewy Inc. (CHWY + $0.21 to $23.58) which is primarily driven by a couple of large blocks that traded on the March 27^th 22.00 put earlier this morning - a 5,000 contract block was bought for $0.70 when the bid/ask spread was $0.52 x $0.74 and (at a different time) a 5,000 contract block was bought for $0.72 when the bid/ask spread was $0.62 x $0.77 (open interest is 2,404). We know that these blocks are new positions based on the open interest figure, and we can assume that the intent is bearish in nature since both trades took place above the midpoint of their respective bid/ask spreads. CHWY is scheduled to report fiscal Q1 earnings on Wednesday before the bell, so this positioning captures the potential impact of that event.

IDEAYA Biosciences Inc. (IDYA - $0.72 to $32.03): Option volume is running at ~25x the daily average on this precision medicine oncology company which is primarily being driven by a couple of large blocks that simultaneously traded on the May 15^th expiration earlier this morning:

• 30.00 put (open interest is 0): A 1,000 contract block traded for $7.00 when the bid/ask spread was $4.50 x $9.00.
• 20.00 put (open interest is 0): A 1,000 contract block traded for $3.75 when the bid/ask spread was $0.10 x $5.00.

While it’s difficult to be certain (since both block trades took place above the midpoint of their respective bid/ask spreads), it appears that a $10.00-wide bear put spread was established for a net debit of $3.25 (x 1,000 contracts x 100 multiplier, excluding commissions). If so, the positioning would suggest that the block trader believes that IDYA will close below the break-even price of $26.75 at expiration.

Aris Mining Corp. (ARIS + $0.66 to $16.77): Option volume is running at ~9x the daily average on this mining company which is primarily driven by activity on the May 15^th 20.00 call. Volume on this contract is 2,951 versus open interest of 1, so it’s likely that nearly all the volume represents fresh positioning. The majority of the transactions consisted of various mid-sized blocks that were bought at various times for between $0.80-0.90 each, which suggests bullish intent.

Braze Inc. (BRZE + $0.11 to $18.44): Option volume is running at ~5x the daily average on this customer engagement platform which is primarily being driven by a 1,800 contract block that was bought on the April 17^th 20.00 call at the ask price of $1.40 (open interest is 771). 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 at the ask price.

The Cboe Volatility Index (VIX - 0.73 to 26.05) has been on both sides of the unchanged line today (the intraday range is 20.28-31.04), as equity markets are higher across the board around the midday mark (DJI + 658, SPX + 78, $COMP + 280). VIX option volume is above average today at 651,871 contracts, and calls and puts have been trading roughly even.