Today's Options Market Update

Stocks came under fresh pressure early thanks to rebounding crude oil prices after a mid-week retreat. Hundreds of ships remain stuck in the Persian Gulf despite U.S. promises to escort oil tankers through the Strait of Hormuz, Reuters reported, and Iran has enough drones to create havoc in the Gulf for months. Domestic crude climbed 3% to nearly$77 per barrel and is up close to 14% from a week ago, raising inflation concerns and Treasury yields. Back home, investors mull today's February layoffs data and solid earnings from chip giant Broadcom (AVGO).

All this sets the stage for tomorrow morning's February nonfarm payrolls report, which could temporarily grab the spotlight in a week dominated by war news. The report, due at 8:30 a.m. ET Friday, is expected to show jobs growth last month sliced in half from January's 130,000, with consensus near 60,000. Unemployment is seen remaining at a low 4.3%. Yesterday's ADP jobs report received positive reviews, easily topping estimates. This morning's Challenger job cuts report for February fell to 48,300 from 108,000 in January, and weekly initial jobless claims stayed low at 213,000.

On Wednesday, major indexes finished moderately up, reversing course from Tuesday's dismal performance. Still, risk appetite appears fragmented. Markets are divided between "buy the dip"—notably for hobbled software shares—and "sell the rip" behavior in crowded areas like metals and memory chips. This tension could result in either a healthy rebalance or sharper risk-off moves if the conflict drags on. At the same time, market breadth remains constructive, though participation has cooled from recent peaks. Institutional hedging appears to remain heavy, with signs that investors are willing to pay up for protection.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is higher by ~5 basis points to 4.129%.

The U.S. Dollar Index ($DXY) is higher by 0.52 to 99.29.

WTI Crude Oil (/CL) is higher by 5.38% to $78.68/barrel.

Gold prices have traded in a range of $5,065.50-5,204.30 and were last seen trading lower by ~0.91% to $5,087.80/oz.

Natural Gas prices for March futures have traded in a range of $2.922-3.009 today and were last seen trading higher by 0.89% to $2.943.

Bitcoin (BTC) is lower by ~1.82% over the last 24 hours to $71,444.19 today.

Shares of Broadcom Inc. (AVGO + $15.53 to $333.01) are moving higher this morning after the chip maker reported fiscal Q1 adjusted EPS of $2.05 ($0.03 beat) on Q1 revenue that increased 29% year-over-year (YoY) to $19.311B (above the $19.195B expected). AVGO also announced a new $10B share buyback program. Looking ahead, the company said that Q2 revenue is expected to be approximately $22B, which is above the $20.50B analysts were expecting. Calls are outnumbering puts ~3:2 with the March 6^th 350.00 call being the highest volume contract (volume is 35,339).

Also trading to the upside this morning is The Trade Desk Inc. (TTD + $4.85 to $30.02) after The Information reported that OpenAI has held early discussions with the ad technology firm about help with selling advertisements on OpenAI’s ChatGPT platform (neither company commented on the report). Last month, OpenAI said that it would begin to test ads on ChatGPT in the U.S. on both its free and Go subscription tiers. Separately, a filing showed that TTD CEO Jeffrey Terry Green accumulated 6.398M shares of TTD between March 2^nd and March 4^th. Calls are outpacing puts better than 2:1, but the March 6^th 29.00 put is the highest volume contract (volume is 14,020).

New 52-week highs (56 new highs today): CF Industries Holdings Inc. (CF + $7.12 to $111.83), Marathon Petroleum Corp. (MPC + $3.74 to $224.51), Valero Energy Corp. (VLO + $3.99 to $229.48)

Some unusual call activity (~20:1 calls over puts) is being seen in utility company NiSource Inc. (NI - $0.75 to $46.81) as option traders primarily target the April 17^th 50.00 call. Volume on this contract is 1,871 versus open interest of 348, so we know that the volume primarily represents fresh positioning. The majority of the transactions consisted of various-sized blocks that were bought around the same time at the ask price of $0.45 each, which suggests bullish intent.
 

Shares of Ciena Corp. (CIEN - $55.00 to $288.00) are under pressure this morning despite beating quarterly estimates earlier this morning. The networking company reported fiscal Q1 adjusted EPS of $1.35 ($0.18 beat) on Q1 revenue of $1.427B (above the $1.399B expected). The company also raised its FY26 revenue guidance to a range of $5.90-6.30B (from $5.70-6.10B), versus the $5.957B consensus estimate. For Q2, Ciena said revenue is expected to come in a range of $1.45-1.55B versus the $1.44B analysts were expecting. Puts are outnumbering calls ~3:2 with the March 20^th 290.00 put seeing the most action from traders (volume is 1,413).

Also trading to the downside today is McKesson Corp.  (MCK - $45.20 to $933.51) following news that the Chief Financial Officer Britt Vitalone will retire after a 20-year career with the company. MCK said that former Sysco CFO Kenny Cheung will assume the role of CFO starting May 29^th. Calls are outnumbering puts ~3:2 with the May 15^th 830.00 call being the only contract with any volume (volume is 188).

New 52-week lows (40 new lows today): Fidelity National Financial Inc. (FNF - $0.62 to $50.14), Gibraltar Industries Inc. (ROCK - $-0.66 to $42.39), Merit Medical Systems Inc. (MMSI - $0.39 to $73.77)

Some unusual put activity (~12:1 puts over calls) is being seen in Alaska Air Group Inc. (ALK - $3.96 to $44.38) which is primarily being driven by a couple of large blocks that were bought around the same time on the April 17^th 42.50 put earlier this morning – a 4,260 contract block was bought at the ask price of $2.70 and a 1,070 contract block was bought at the ask price of $2.65 (open interest is 720). 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 the trades took place at their respective ask prices.

Phathom Pharmaceuticals Inc. (PHAT + $0.01 to $11.07): Option volume is running at ~66x the daily average on this biopharmaceutical company which is primarily being driven by a couple of large blocks that simultaneously traded on the January 2028 expiration earlier this morning:

• 7.50 call (open interest is 0): A 3,000 contract block was bought for $7.80 when the bid/ask spread was $5.00 x $10.00.
• 12.50 call (open interest is 6): A 3,000 contract block traded for $6.00 when the bid/ask spread was $3.50 x $8.50.

We know that these blocks are new positions based on the respective open interest figures, and it appears (since the trade on the 7.50 call took place above the midpoint of the bid/ask spread) that a $5.00-wide bull call spread was established for a net debit of $1.80 (x 3,000 contracts x 100 multiplier, excluding commissions). The positioning suggests that the block trader believes that PHAT will close above the break-even price of $9.30 at expiration.

Ionis Pharmaceuticals Inc. (IONS - $4.45 to $75.00): Option volume is running at ~25x the daily average on this provider of RNA-targeted medicines which is primarily driven by a 3,490 contract block that was bought on the March 20^th 75.00 put for $2.50 when the bid/ask spread was $0.95 x $2.60 (open interest is 128). 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.

Compass Pathways PLC (CMPS - $0.13 to $6.92): Option volume is running at ~7x the daily average on this biotech company which is primarily driven by a 5,000 contract block that was bought on the May 15^th 7.00 put for $0.85 when the bid/ask spread was $0.00 x $1.60 (open interest is 195). 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 + 2.25 to 23.40) has been on both sides of the unchanged line today (the intraday range is 20.55-23.70), as equity markets are lower across the board around the midday mark (DJI - 860, SPX - 58, $COMP - 130). VIX option volume is above average today at 503,742 contracts, and calls are slightly outnumbering puts.