Today's Options Market Update

The jobs picture stayed lackluster in December as the economy created just 50,000 positions, according to Friday's nonfarm payrolls report. That was down from a downwardly revised 56,000 in November. However, unemployment fell unexpectedly to 4.4% from a revised 4.5% in November, possibly a relief for Federal Reserve officials who'd worried about a recent climb. Analysts had expected jobs growth near 70,000 and unemployment of 4.5%. Major indexes initially rose on the report, perhaps amid thoughts that unemployment dropping means a stronger economy. January rate cut odds dropped sharply.

"The jobs report will likely be welcomed by Fed officials as the unemployment rate, a key indicator they follow, ticked down by two tenths of a percent," said Collin Martin, head of fixed income research and strategy, Schwab Center for Financial Research (SCFR). "Yields initially rose following the release, likely due to the headline-grabbing drop in the unemployment rate, but have since fallen to where they were before the release, as a comprehensive look at the report supports the idea that the labor market is continuing to cool. This shouldn't change the Fed's near-term plans, and we still expect the Fed to hold rates steady for the next few meetings."

Major indexes ended mixed Thursday. The tech sector, dominated by mega-caps, kept the S&P 500 index in check even as advancing shares outpaced declining ones overall. Strength in energy, staples, discretionary, and materials reflected positive economic data, but was balanced by weakness in semiconductors. The Russell 2000 (RUT) index of small caps climbed and so did the Dow Jones Industrial Average, but the Nasdaq retreated.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is modestly lower by 1 basis point to 4.17%.

The U.S. Dollar Index ($DXY) is higher by 0.23 to 99.16.

WTI Crude Oil (/CL) is higher by 2.72% to $59.33/barrel.

Gold prices have traded in a range of $4,461.80-$4,527.00 and were last seen trading higher by ~1.14% to $4,511.70/oz.

Natural Gas prices have traded in a range of $2.56-2.84 today and were last seen trading lower by 4.83% to $2.68.

Bitcoin (BTC) is higher by ~0.30% to $91,342.00 today.

Shares of Vistra Corp. (VST + $26.10 to $176.70) and Oklo Inc. (OKLO +17.70 to $115.40) are both gapping higher this morning after Meta Platforms Inc. (META + 1.94 to $646.06) said it would back nuclear projects with the two companies to power AI data centers. VST calls are outpacing puts ~2:1 with the January 16th 175.00 call being the highest volume contract (volume is 958). OKLO calls are outpacing puts ~2:1 with the January 16th 120.00 call being the highest volume contract (volume is 4,725).

Also trading to the upside this morning is Constellation Energy Corp. (CEG + $22.45 to $345.00) after TD Cowen initiated coverage of the electric power, natural gas, and energy management services company with a "Buy" rating and a price target of $440.00. Puts are outnumbering calls ~2:1 with the January 16th 350.00 put leading the way (volume is 2,525).

New 52-week highs (146 new highs today): Alphabet Inc. (GOOGL + $4.16 to $329.60), Analog Devices Inc. (ADI + $0.53 to $299.69), Intel Corp. (INTC + $3.55 to $44.66)

Some unusual call activity (~17:1 calls over puts) is being seen in genomic medicine developer Uniqure NV (QURE + $2.67 to $25.82) which is primarily driven by a 6,000-contract block that was bought on the April 17th 30.00 call for $6.50 when the bid/ask spread was $6.00 x $6.70 (open interest is 1,203). 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.

Shares of General Motors Company (GM - $1.63 to $83.50) are under pressure this morning after the automaker warned that it would take a $7.1 billion charge in the fourth quarter, citing a pullback in EV sales and restructuring efforts in China. Calls are slightly outnumbering puts with the February 20th 87.50 call being the highest volume contract (volume is 2,285).

Also trading to the downside today is Masco Corporation (MAS - $1.58 to $65.64) after RBC lowered its price target on the home improvement and building products company to $67.00 from $69.00, while maintaining their "Sector Perform" rating. Calls are modestly outnumbering puts in light volume with the January 16th 70.00 call being the highest volume contract (volume is 47).

New 52-week lows (40 new lows today): Cable One Inc. (CABO - $3.11 to $95.46), Cal-Maine Foods Inc. (CALM - $2.10 to $73.36), WD 40 Company (WDFC - $13.51 to $189.99)

Some unusual put activity (~5:1 puts over calls) is being seen in immunotechnology company ADMA Biologics Inc. (ADMA - $0.01 to $18.06) which is primarily driven by a 5,000-contract block that was bought on the January 16th 17.00 put for $0.95 when the bid/ask spread was $0.10 x $1.10 (open interest is 1,542). 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.

MediaAlphia Inc. (MAX - $0.04 to $11.68): Option volume is running over 100x the daily average on this digital advertising company as option traders primarily target the May 15th 12.50 call. Volume on this contract was driven by a 3,000 a contract block that was bought at $1.75 when the bid/ask spread was $0.30 x $2.95. Open interest is 3, so we know that this trade represents new positioning, and since the trade took place above the midpoint of the bid/ask spread, it suggests bullish intent.

Meritage Homes Corp. (MTH + $5.58 to $73.94): Option volume is running at ~46x the daily average on this home builder which is primarily driven by multiple-sized blocks being bought on the February 20th 75.00 call around the same time for $3.10 each. Volume on this contract is 3,044 versus open interest of 11, so we know that this represents fresh positioning, and we can assume that the intent is bullish in nature.

Ingersoll Rand Inc. (IR + $1.26 to $85.63): Option volume is running at ~29x the daily average on this industrial company which is primarily driven by multiple medium-sized blocks (100, 100, 100, 100, and 500) being bought on the February 20th 90.00 call around the same time for $2.25 each when the bid/ask spread was $0.60 x $3.70. Open interest of 41 so we know these trades represent fresh positioning, and we can assume that the intent is bullish in nature since they took place above the midpoint of the bid/ask spread.

The Cboe Volatility Index (VIX - 0.87 to 14.58) has been on both sides of the unchanged line today (the intraday range is 15.81-14.59), as equity markets are higher around the midday mark (DJI + 252, SPX + 46, $COMP +189). VIX option volume is above average today at 373,871 contracts, and calls are outpacing puts ~2:1 so far today.