Today's Options Market Update

After an earnings belly flop by Netflix (NFLX) late Tuesday, Tesla (TSLA) prepares to report after the close. Stocks flattened this morning as other company results this week generally impressed, but a big sell-off in gold, silver, and certain speculative stocks yesterday raised red flags about "risk-off" sentiment percolating.

Tesla is a highlight later as the first mega cap to post results. The EV firm's shares rallied sharply in the third quarter as production figures improved and hopes grew for a trade truce with China, where Tesla makes and sells many vehicles. The trade situation, AI spending, profit margins, and future production estimates are likely to come up on Tesla's earnings call, along with competition as companies spar for what might be a smaller pie after the recent end of U.S. government EV credits. Speaking of the government, the shutdown reached three weeks today. "There has been little movement to resolve the current standoff," said Michael Townsend, managing director, legislative and regulatory affairs at Schwab.

Stocks had a mixed session Tuesday, with the Dow Jones Industrial Average hitting record highs on solid earnings from "old economy" stocks, while the tech-heavy Nasdaq Composite declined. The miss by Netflix Tuesday might not have as much impact considering the company blamed it on an internal tax-related issue and cited firm customer engagement. But caution may be growing anyway, symbolized by yesterday's weakness in gold, silver, crypto, and more speculative stocks. Also, the 10-year Treasury yield (TNX:CGI) fell to another six-month low Tuesday below 3.95%. Strength in Treasuries—which move the opposite of yields—is often a sign of money seeking perceived safety.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is slightly higher to 3.968%.

The U.S. Dollar Index ($DXY) is lower by 0.09 to 98.84.

WTI Crude Oil (/CL) is higher by ~2.39% to $58.61/barrel.

Gold prices have traded in a range of $4,021.20-$4,175.00, last seen trading lower by ~1.60% to $4,041.80/oz.

Natural Gas prices have traded in a range of $3.442-3.572 today and were last seen trading lower by 0.35% to $3.462.

Bitcoin (BTC) is lower by ~0.03% to $108,342.60 today.

Gapping up to a three-month high this morning is Intuitive Surgical Inc. (ISRG + $72.95 to $535.69) after the medical device maker reported Q3 earnings of $2.40 per share, excluding non-recurring items ($0.41 beat) on revenue that rose 22.9% year-over-year (YoY) to $2.51B (above the $2.41B FactSet consensus estimate). Looking ahead, the company said that it expects worldwide da Vinci procedure growth to be 17.0-17.5% in 2025 vs. 17.0% in 2024 and non-GAAP gross profit margin to be within a range of 67.0-67.5% of revenue in 2025 vs. 69.1% in 2024. Calls are outnumbering puts ~2:1 with the October 24^th 550.00 call seeing the most action from traders (volume is 2,957).

Also trading to the upside this morning is Hilton Worldwide Inc. (HLT + $12.39 to $278.35) after the hotel operator reported Q3 earnings of $2.11 per share, excluding non-recurring items ($0.06 beat) on revenue that rose 8.8% year-over-year to $3.12B (above the $3.01B FactSet consensus estimate). Regarding guidance, the company said that Q4 EPS is expected to come in a range of $1.94-2.03 (vs. the $2.00 FactSet consensus estimate) and full-year 2025 (FY25) EPS to come in a range of $7.97-8.06 (vs. the $7.99 FactSet consensus estimate). Calls are outnumbering puts ~4:3 with the November 21^st 165.00 call being the highest volume contract (volume is 2,248).

New 52-week highs (58 new highs today): Amphenol Corp. (APH + $4.93 to $129.37), Rio Tinto PLC (RIO + $1.36 to $69.70), Signet Jewelers Ltd. (SIG + $2.64 to $107.42)

Some unusual call activity (~5:1 calls over puts) is being seen in Energy Fuels Inc. (UUUU + $0.50 to $21.13) as option traders primarily target the November 21^st 29.00 call. Volume on this contract is 36,885 versus open interest of 1,195, 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 $1.10-2.00 each, which suggests bullish intent.

Leading the point decliners list this morning is Netflix Inc. (NFLX - $120.14 to $1,121.21) are moving lower this morning after the streaming giant missed on earnings which the company attributed to an ongoing tax dispute with Brazilian tax authorities. Netflix reported Q3 earnings of $5.87 per share ($1.09 miss) on revenue that rose 17.2% YoY to $11.51B (in-line with estimates) as Q3 operating margin came in at 28.2% (below prior guidance of 31.5%). Regarding guidance, the company said that Q4 EPS is expected to be $5.45 (slightly above the $5.43 expected) on Q4 revenue that is expected to be $11.96B (slightly above the $11.89B FactSet consensus estimate) with Q4 operating margin expected to be 23.9%. Calls are outnumbering puts ~5:4, but the October 24^th 1100.00 call is the highest volume contract (volume is 17,970).

Also trading to the downside this morning is GE Vernova Inc. (GEV - $50.11 to $535.22) after the power equipment provider reported Q3 earnings of $1.64 per share ($0.08 miss) on revenue that rose 11.8% YoY to $9.97B (above the $9.15B FactSet consensus estimate). Looking ahead, the company said that FY25 revenue is expected to come toward the higher end of the range of $36-37B, which is slightly below the $37.17B FactSet consensus estimate. Calls and puts are trading roughly even with the December 19^th 480.00 put being the highest volume contract (volume is 4,256).

New 52-week lows (59 new lows today): Anterix Inc. (ATEX - $0.52 to $19.83), Charter Communications Inc. (CHTR - $2.26 to $250.26), Unifirst Corp. (UNF - $9.60 to $163.77)

Some unusual put activity (~67:1 puts over calls) is being seen in Cognizant Technology Solutions Corp. (CTSH + $0.27 to $69.04) which is primarily driven by a 3,500 contract block that was bought on the November 21^st 65.00 put at the ask price of $1.70 (open interest is 2,338). 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.

Brunswick Corp. (BC + $0.26 to $65.26): Option volume is running at over ~71x the daily average on this boat and marine technology company which is primarily being driven by a couple of large blocks that simultaneously traded on the November 21^st expiration earlier this morning:

• 70.00 call (open interest is 584): A 1,570 contract block was bought for $2.00 when the bid/ask spread was $1.55 x $2.40.
• 60.00 put (open interest is 339): A 1,570 contract block was sold for $1.10 when the bid/ask spread was $1.05 x $1.60.

We know that both these blocks are new positions based on the respective open interest figures, and it appears that a (bullish) risk reversal was established for a net debit of $0.90 (x 1,570 contracts x 100 multiplier, excluding commissions). The positioning suggests that the block trader believes that BC will close above the break-even price of $70.90 at expiration.

Packaging Corp. of America (PKG + $3.11 to $211.24): Option volume is running at ~30x the daily average on this manufacturer of containerboard and uncoated freesheet (UFS) paper products which is primarily driven by a 1,400 contract block that was bought on the November 21^st 200.00 put at the ask price of $4.00 (open interest is 27). 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 at the ask price.

Camping World Holdings Inc. (CWH + $0.53 to $16.42): Option volume is running at ~21x the daily average on this RV-maker which is primarily driven by a 2,000 contract block that was bought on the November 21^st 16.00 call for $1.50 when the bid/ask spread was $0.95 x $1.55 (open interest is 219). 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.

The Cboe Volatility Index (VIX + 1.35 to 19.22) has been on both sides of the unchanged line today (intraday range is 17.73-20.12), as equity markets are lower across the board around the midday mark (DJI - 232, SPX - 44, COMP - 278). VIX option volume is above average today at 739,062 contracts, which puts the index at the #9 spot on the "Top Volume by Underlying" list. The volume put/call ratio is currently 0.26 with the highest volume contract being the April 2026 47.50 call (volume is 120,042 vs. open interest of 4,269).