Today's Options Market Update

Stocks surrendered most of yesterday's gains thanks to a 4% rally in oil, rising Treasury yields, and little sign of progress in the Middle East. More threats and additional U.S. troops heading into the region overshadowed hopes for peace that lifted stocks Wednesday. President Trump's five-day extension of an escalation deadline approaches this weekend, and Iran refused to directly negotiate but is reviewing a U.S. proposal.

Today is light on data beyond an as-expected weekly initial jobless claims figure of 210,000. Tomorrow features final March University of Michigan's Consumer Sentiment after a tepid preliminary reading, and the report's inflation outlook could be key. In data yesterday, U.S. import prices rose 1.3% month over month in February, the government said, the largest increase since March 2022. "A much longer Strait of Hormuz shutdown and sustained higher oil prices could represent significant demand destruction," said Liz Ann Sonders, chief investment strategist at the Schwab Center for Financial Research (SCFR).

On Wednesday, major indexes rose for the second time in three sessions on hopes for peace negotiations in a conflict that's raised costs for U.S. consumers and businesses. Gas prices approached $4 per gallon on average, AAA reported, and diesel fuel prices neared $5.40. That's devastating for trucking firms and for farmers getting ready to plant amid rising fertilizer costs. The U.S. Postal Service announced Wednesday it's adding an 8% fuel surcharge to packages. However, airline executives appear to be looking through the crisis, as United Airlines (UAL) announced it expects to take delivery of more than 250 new aircraft by April 2028.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is higher by ~4 basis point to 4.366%.

The U.S. Dollar Index ($DXY) is higher by 0.11 to 99.71.

WTI Crude Oil (/CL) is higher by 2.82% to $92.87/barrel.

Gold prices have traded in a range of $4,442.00-4,574.00 and were last seen trading lower by ~2.08% to $4,489.20/oz.

Natural Gas prices for March futures have traded in a range of $2.918-2.992 today and were last seen trading higher by 0.68% to $2.972.

Bitcoin (BTC) is lower by ~2.38% over the last 24 hours to $69,615.43 today.

Shares of The Lovesac Company (LOVE + $2.82 to $14.11) are moving higher this morning after the furniture maker reported Q4 EPS of $2.19 ($0.18 beat) on Q4 sales of $248.046M (above the $242.775M expected). In terms of guidance, the company said that fiscal-year 2027 (FY27) EPS is expected to come in a range of $0.34-0.95 with FY27 sales expected to come in a range of $700-750M, versus the respective $0.78 & $735.743M consensus estimates. Calls are outnumbering puts ~13:1 with the April 17^th 15.00 call being the highest volume contract (volume is 3,537). If you read Tuesday’s blog, you might recall that LOVE was highlighted for unusual call activity on the April 17^th 12.50 calls, where traders were purchasing those calls for $0.80 & $0.85 each.

Also trading to the upside this morning is ICON PLC (ICLR + $2.44 to $102.43) after BMO Capital upgraded the clinical research organization to “Outperform” from “Market Perform” and increased their price target on the stock to $130.00 from $100.00. Analysts at BMO Capital analyst Sean Dodge said that recent wallet-share wins and losses and exposure to ongoing client restructuring suggest continued incremental positive improvements within the large pharma backdrop. Option volume is relatively light with the May 15^th 95.00 put leading the way (volume is 250).

New 52-week highs (69 new highs today): California Resources Corp. (CRC + $1.28 to $68.24), Lyondellbasell Industries NV (LYB + $0.77 to $77.96), Ross Stores Inc. (ROST + $0.61 to $216.64)

Some unusual call activity (~90:1 calls over puts) is being seen in furniture maker Jefferies Financial Group Inc. (JEF + $0.17 to $39.81) which is primarily being driven by a couple of large blocks that simultaneously traded on the May 15^th expiration earlier this morning:

• 45.00 call (open interest is 15): An 8,000 contract block was bought at the ask price of $1.40.
• 55.00 call (open interest is 2): An 8,000 contract block was sold for $0.16 when the bid/ask spread was $0.80 x $0.75.

We know that both these blocks are new positions based on the respective open interest figures, and it appears that a $10.00-wide bull call spread was established for a net debit of $1.24 (x 8K contracts x 100 multiplier, excluding commissions). The positioning suggests that the block trader believes that JEF will close above the break-even price of $46.24 at expiration. Shares of JEF are trading slightly in the green today after the financial services provider reported Q1 earnings last night after the bell.

Shares of The Scotts Miracle-Gro Company (SMG - $3.17 to $64.50) are moving lower this morning after JPMorgan downgraded the maker of lawn and garden care products to “Neutral” from “Overweight” and trimmed their price target on the stock to $67.00 from $70.00. Analysts at JPMorgan cited the negative impact of rising raw materials costs, driven by the Iran war, on SMG’s future profits. Option volume is relatively light with the May 15^th 55.00 put being the highest volume contract (volume is 29).

Also trading to the downside is Noah Holdings Ltd. (NOAH - $1.03 to $10.30) after JPMorgan downgraded the asset manager to “Neutral” from “Overweight” and lowered their price target on the stock to $12.00 from $14.70. Analysts at JPMorgan cited the company’s Q4 results, which showed an 81% year-over-year drop in non-GAAP net income, and could lead to downward revisions to estimates by analysts. Option volume is relatively light with the April 17^th 7.50 call being the highest volume contract (volume is 58).

New 52-week lows (85 new lows today): Check Point Software Inc. (CHKP + $1.07 to $143.48), DoorDash Inc. (DASH + $0.66 to $153.58), Monday.com Ltd. (MNDY + $0.99 to $70.27)

Some unusual put activity (~30:1 puts over calls) is being seen in Icahn Enterprises L.P. (IEP + $0.08 to $7.68) as option traders primarily target the September 18^th 5.00 put. Volume on this contract is 3,000 versus open interest of 1,006, so we know that the volume primarily represents fresh positioning. The activity included a 1,980 contract block that was bought at the ask price of $0.25. We know that this block is a new position based on the open interest figure and we can assume the intent is bearish in nature since the trade took place at the ask price.

Melco Resorts & Company Inc. (MLCO + $0.02 to $5.50): Option volume is running at ~109x the daily average on this China-based casino operator which is primarily being driven by a 9,850 contract block that was bought on the January 2027 7.00 call for $0.71 when the bid/ask spread was $0.55 x $0.75 (open interest is 2,165). 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.

MakeMyTrip Ltd. (MMYT + $0.56 to $39.67): Option volume is running at ~16x the daily average on this travel service provider which is primarily being driven by a couple of large blocks that simultaneously traded on the April 17^th expiration earlier this morning:

• 40.00 call (open interest is 2,065): A 5,000 contract block was bought for $3.07 when the bid/ask spread was $2.60 x $3.20.
• 45.00 call (open interest is 2,010): A 5,000 contract block was sold for $0.92 when the bid/ask spread was $0.85 x $1.35.

We know that both 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 $2.15 (x 5K contracts x 100 multiplier, excluding commissions). The positioning suggests that the block trader believes that MMYT will close above the break-even price of $42.15 at expiration.

ADMA Biologics Inc. (ADMA - $1.74 to $7.90): Option volume is running at ~12x the daily average on this biotech firm which is primarily being driven by a couple of large blocks that simultaneously traded on the June 18^th expiration earlier this morning:

• 10.00 call (open interest is 5): A 9,140 contract block was bought at the ask price of $0.90.
• 15.00 call (open interest is 111): A 9,140 contract block was sold for $0.10 when the bid/ask spread was $0.00 x $0.30.

We know that both 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 $0.80 (x 9,140 contracts x 100 multiplier, excluding commissions). The positioning suggests that the block trader believes that ADMA will close above the break-even price of $10.80 at expiration. Shares of ADMA are trading ~19% lower this morning following a downgrade (from Overweight to Neutral) by Cantor Fitzgerald.

The Cboe Volatility Index (VIX + 0.11 to 26.26) has been in positive territory all day today (the intraday range is 26.12-27.84), as equity markets are lower across the board around the midday mark (DJI - 267, SPX - 60, $COMP - 272). VIX option volume is above average today at 413,232 contracts, and puts are outnumbering calls ~3:2 so far today.