Today's Options Market Update

The Federal Reserve's rate cut and upbeat outlook put Wall Street in a good mood that quickly got spoiled by Oracle (ORCL). Shares tumbled more than 13% in pre-market trading after the firm's quarterly revenue disappointed, dragging down other AI-related names including Nvidia (NVDA) on concerns that AI spending isn't being rewarded. Broadcom (AVGO) reports after the close, providing another perspective.

While Fed Chairman Jerome Powell sounded dovish in some respects, he also strongly hinted at a rate pause. He noted that after 75 basis points of cuts since September, the current target range "is in a broad range of estimates of neutral value," and the committee "is well positioned to wait and see how the economy evolves from here." The Fed's "dot plot" of rate projections forecasts just one cut in 2026, in contrast to futures trading that predicts two to three, according to the CME FedWatch Tool. But Fed projections are wide. "The dot plot is starting to look like confetti thrown on a piece of paper," said Kathy Jones, chief fixed income strategist at the Schwab Center for Financial Research.

Major indexes closed near all-time highs Wednesday after the rate move, led mainly by cyclical sectors like industrials and discretionary that drew support from the Fed's bullish quarterly economic projections. The Fed sees stronger gross domestic product (GDP) and slower inflation growth next year. Yesterday's Fed decision—along with the AI earnings this week and next Tuesday's November nonfarm payrolls report—could help shape trading trends into the new year. One trend Powell noted is consumer resilience, and many participants at this week's Goldman Sachs (GS) industry conference also talked up the strength they're seeing this shopping season. This had many retail stocks on the upswing even before the Fed's cheery tidings.

Make sure to check out our upcoming Schwab Market Outlook where you can get expert insights on market drivers and their potential impact on your portfolio. Please see the summary and link below.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is lower by 5 basis points to 4.116%.

The U.S. Dollar Index ($DXY) is higher by 0.613 to 98.173.

WTI Crude Oil (/CL) is lower by 2.12% to $57.22/barrel.

Gold prices have traded in a range of $4,231.20-$4,306.20 and were last seen trading higher by ~1.91% to $4,305.60/oz.

Natural Gas prices have traded in a range of $4.219-4.631 today and were last seen trading lower by 8.12% to $4.222.

Bitcoin (BTC) is lower by ~2.41% to $89,820.19 today.

Gapping up to all-time highs this morning is Ciena Corp. (CIEN + $6.43 to $228.28) after the networking-equipment company reported Q4 adjusted earnings of $0.91 per share ($0.13 beat) on revenue that increased 20% year-over-year (YoY) to $1.35B (above the $1.29B expected). The company also issued upbeat guidance as fiscal 2026 revenue is expected to come in a range of $5.7-6.1B versus the $5.5B analysts were expecting. Calls are outnumbering puts ~3:2 with the December 12^th 240.00 call seeing the most action from traders (volume is 488).

Also trading to the upside this morning is Roku Inc. (ROKU + $4.68 to $110.04) after Jefferies upgraded the streaming platform to “Buy” from “Hold” and raised their price target on the stock to $135.00 from $100.00. Analysts at Jefferies see the potential for the company to deliver 20%+ platform revenue growth. Separately, Wedbush increased their price target on ROKU to $130.00 from $115.00. Calls are outnumbering puts ~5:2 with the December 12^th 115.00 call being the highest volume contract (volume is 844).

New 52-week highs (306 new highs today): Alcoa Corp. (AA + $2.65 to $47.29), Caterpillar Inc. (CAT + $6.46 to $621.81), Goldman Sachs Group (GS + $17.61 to $906.85)

Some unusual call activity (~23:1 calls over puts) is being seen in lidar sensor maker Eldorado Gold Corp. (EGO + $2.10 to $35.67) as option traders primarily target the December 2026 40.00 call. Volume on this contract is 2,013 versus open interest of 61, so it’s likely that nearly all the volume represents new positioning. The majority of the transactions consisted of various-sized blocks that were bought at various times for between $4.50-4.90 each, which suggests bullish intent.

Shares of Oracle Corp. (ORCL - $29.32 to $193.69) after the software and cloud giant reported fiscal Q2 adjusted EPS of $2.26 ($0.62 beat) on revenue that increased 13% YoY to $16.1B (slightly below the $16.2B expected) with ORCL’s remaining performance obligation (RPO) increased 438% YoY to $523B (above the $502B FactSet consensus estimate). Oracle said that fiscal 2026 CapEx will be about $15B higher than what was forecasted after the last quarter, which is likely contributing to the sell-off in the stock. Beyond that, the company said that Q3 total cloud revenue is expected to grow 37-41% YoY in constant currency with Q3 adjusted profits expected to increase 12-14% YoY. Calls are outnumbering puts ~3:2 with the December 12^th 200.00 call seeing the most action from traders (volume is 46,847).

Also trading to the downside this morning is GE Vernova Inc. (GEV - $31.67 to $691.33) after Seaport Global downgraded the energy equipment manufacturer to “Hold” from “Buy” without a price target on the stock, citing the stock’s “fair valuation”. The downgrade comes a day after the stock hit an all-time high of $731 following the company’s bullish outlook at an investor event in New York on Tuesday. Calls and puts are trading roughly even with the December 12^th 695.00 call garnering the most attention from traders (volume is 664).

New 52-week lows (46 new lows today): Doximity Inc. (DOCS - $0.38 to $44.66), Oxford Industries Inc. (OXM - $8.37 to $32.08), T-Mobile US Inc. (TMUS + $0.01 to $195.33)

Some unusual put activity (~90:1 puts over calls) is being seen in renewable energy company XPLR Infrastructure (XIFR - $0.01 to $8.99) which is primarily driven by a 3,000 contract block that was bought on the April 2026 9.00 put for $0.98 when the bid/ask spread was $0.80 x $1.00 (open interest is 221). 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.

Par Technology Corp. (PAR + $0.29 to $37.85): Option volume is running at ~290x the daily average on this software company which is primarily being driven by some spread activity on the April 2026 expiration earlier this morning:

• 50.00 call (open interest is 4): A 3,500 contract block traded for $1.88 when the bid/ask spread was $0.15 x $2.05.
• 70.00 call (open interest is 2): A 3,500 contract block was simultaneously bought at the ask price of $0.75.

We know that these blocks are new positions based on the respective open interest figures, and it appears (since the trade on the 70.00 call took place at the ask price) that a $20.00-wide bear call spread was established for a net credit of $1.13 (x 3,500 contract x 100 multiplier, excluding commissions). The positioning suggests that the block trader believes that PAR will close below the break-even price of $51.13 at expiration.

TETRA Technologies Inc. (TTI + $0.37 to $9.11): Option volume is running at ~30x the daily average on this provider of energy services and solutions which is primarily driven by a 7,840 contract block that was bought on the January 16^th 8.00 call for $1.70 when the bid/ask spread was $1.50 x $1.80 (open interest is 3,314). We know that this block is a new position based on the open interest figure, and we can assume that the intent is bullish in nature since the trade took place above the midpoint of the bid/ask spread.

Caesars Entertainment Inc. (CZR + $0.29 to $23.78): Option volume is running at ~6x the daily average on this casino operator which is primarily being driven by some spread activity on the March 2026 expiration earlier this morning:

• 25.00 call (open interest is 845): A 10,000 contract block was bought for $2.13 when the bid/ask spread was $2.00 x $2.19.
• 30.00 call (open interest is 5,294): A 10,000 contract block was simultaneously sold at the bid price of $0.68.

We know that these blocks are new positions based on the respective open interest figures and it appears that a $5.00-wide bull call spread was established for a net debit of $1.45 (x 10K contract x 100 multiplier, excluding commissions). The positioning suggests that the block trader believes that CZR will close above the break-even price of $26.45 at expiration.

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.