Today's Options Market Update

Bastille Day dawned with stocks lower following weekend trade fireworks. President Trump threatened 30% tariffs on imports from the European Union and Mexico that would take effect August 1, barring deals between now and then. The announcement followed last week's threats of tariffs on Canada that put the rally on pause, while investors brace for big bank earnings and key inflation data early tomorrow.

Several major banks kick off earnings season tomorrow, and their numbers often come with comments on economic trends from executives closely tuned in to underlying dynamics. While the economic data has held up relatively well recently, any negative surprises could generate some selling pressure given the impressive rally that stocks have staged off the April lows. And while I don't expect earnings from the financial sector to be bad—the earnings bar has been lowered heading into next week—I think the potential for a 'sell on the news' response is elevated given the setup.

Stocks retreated Friday and fell for the week after President Trump threatened a 35% tariff on imports from Canada, 25% on Japan, and 50% on copper. Treasury yields edged up amid concerns that tariffs could raise prices and hinder growth, and are up again this morning, along with market volatility. "We're back to 'Liberation Day' levels of tariffs despite the negotiations and deals that have been in play since then," Schwab's fixed income experts said, referring to Trump's original tariff levels announced April 2 and then delayed. Plans for business investment appear to be softening, and there's been some deterioration in the labor market, they added.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is higher by ~1 basis points to 4.433%.

The U.S. Dollar Index ($DXY) is higher by 0.06 to 97.92.

WTI Crude Oil (/CL) is lower by 0.41% to $68.17/barrel.

Gold prices have traded in a range of $3,353.20-$3,389.30, last seen trading lower by 0.21% to $3,356.40/oz.

Natural Gas prices have traded in a range of $3.383-3.499 and were last seen trading higher by 5.25% to $3.488.

Bitcoin (BTC) is higher by ~1.63% today to $120,859.70, after hitting fresh all-time highs above $122,000 earlier in the day.

Joining the 52-week high list this morning is Fastenal Inc. (FAST + $2.48 to $45.75) after the distributor of industrial and construction supplies reported fiscal Q2 earnings of $0.29 per share ($0.01 beat) on revenue that rose 8.6% year-over-year to $2.08B (slightly above the $2.07B expected). Looking ahead, the company said that it expects investment in property and equipment, net of proceeds from sales, to come in a range of $250-270M, which is a decrease from prior guidance of $265-285M, but above the $214.1M spent in 2024. Calls are outnumbering puts ~5:3 with the July 18^th 45.00 call being the highest volume contract (volume is 2,085).

Also trading to the upside this morning is Visteon Corp. (VC + $2.29 to $113.02) after UBS upgraded the automotive technology company to "Buy" from "Neutral" and hiked their price target on the stock to $142.00 from $85.00. Analysts at UBS said that the company is developing a "true durable outgrowth story" by diversifying and growing with new customers, particularly Toyota. Calls are outpacing puts ~100:1 on relatively light volume, primarily driven by activity on the August 15^th 115.00 call (volume is 500).

New 52-week highs (81 new highs today): Boeing Company (BA + $1.20 to $228.04), GE Vernova Inc. (GEV + $7.35 to $546.51), Roblox Corp. (RBLX + $4.05 to $109.74)

Some unusual call activity (~33:1 calls over puts) is being seen in Idaho Strategic Resources Inc. (IDR + $1.04 to $17.80) as option traders primarily target the November 21^st 22.50 call. Volume on this contract is 1,383 versus open interest of 138, so we know that the volume primarily represents fresh positioning. The bulk of the transactions consisted of various-sized blocks that were bought around the same time at the ask price of $1.70 each, which suggests bullish intent.

Joining the 52-week low club this morning is Proctor & Gamble Co. (PG - $3.20 to $153.85) after Evercore ISI downgraded the consumer products maker to "In Line" from "Outperform" and cut their price target on the stock to $170.00 from $190.00. Analysts at Evercore ISI said that while the macro pressures are likely transient, they are concerned about adverse shifts in retail channels that will challenge PG's growth potential and could cap sales growth below the +4% needed to drive operating leverage. Calls are outnumbering puts ~3:1 with the July 18^th 155.00 call leading the way (volume is 1,408).

Also trading to the downside this morning is Best Buy Inc. (BBY - $2.15 to $69.64) after Piper Sandler downgraded the electronics retailer to "Neutral" from "Overweight" and lowered their price target on the stock to $75.00 from $82.00. Analysts at Piper Sandler cited a lack of meaningful catalysts that could accelerate comparable sales or earnings growth in the coming quarters along with competition concerns. Puts are slightly outnumbering calls with the July 18^th 70.00 put being the highest volume contract (volume is 114).

New 52-week lows (29 new lows today): Centene Corp. (CNC - $0.45 to $31.00), Helen of Troy Ltd. (HELE - $0.89 to $21.66), Teleflex Inc. (TFX - $0.70 to $115.70)

Some unusual put activity is being seen in SolarEdge Technologies Inc. (SEDG + $0.41 to $26.03) as option traders primarily target the August 15^th 27.50 put. Volume on this contract is11,047 (vs. open interest of 124), which included a 6,000 contract block that was bought for $4.00 when the bid/ask spread was $3.80 x $4.10. 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 above the midpoint of the bid/ask spread.

Nerdwallet Inc. (NRDS - $0.03 to $10.56): Option volume is running at ~65x the daily average on this digital financial platform operator which is primarily being driven by activity on the August 15^th 12.50 call. Volume on this contract is 1,075 versus open interest of 41, so we know that the volume primarily represents fresh positioning. The bulk of the transactions consisted of various-sized blocks that were bought around the same time for between $0.25-0.35 each, which suggests bullish intent. NRDS is scheduled to report Q2 earnings on August 6^th after the bell, so this positioning captures the potential impact of that event.

uniQure N.V. (QURE + $0.20 to $14.60): Option volume is running at ~30x the daily average on this alternative asset manager which is primarily being driven by two large blocks that simultaneously traded on the August 15^th expiration earlier this morning:

• 15.00 call (open interest is 925): A 2,500 contract block was bought for $4.12 when the bid/ask spread was $2.90 x $4.70.
• 30.00 call (open interest is 64): A 2,500 contract block was sold for $0.82 when the bid/ask spread was $0.00 x $1.80.

We know that both these blocks are new positions based on the respective open interest figures and it appears that a $15.00-wide bull call spread was established for a net debit of $3.30 (x 2,500 contract x 100 multiplier, excluding commissions). The positioning suggests that the block trader believes that QURE will close above the break-even price of $18.30 at expiration.

Procore Technologies Inc. (PCOR + $1.20 to $72.77): Option volume is running at ~9x the daily average on this software company which is primarily being driven by a 1,000 contract block that was bought on the August 15^th 80.00 call for $1.80 when the bid/ask spread was $1.15 x $1.90 (open interest is 80). 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 + 0.73 to 17.13) has been in positive territory all day today (intraday range is 17.03-17.85), as equity markets are slightly higher around the midday mark (DJI + 17, SPX + 1, COMP + 34). VIX option volume is above average today at 448,651 contracts, which puts the index at the #9 spot on the "Top Volume by Underlying" list. The volume put/call ratio is currently 0.67 with the highest volume contract being the July 16th 26.00 call (volume is 39,542 vs. open interest of 140,651).