Today's Options Market Update

The Federal Reserve meeting already seems long ago after it kept rates paused and Chairman Jerome Powell called for patience amid uncertain tariff policy. Instead, Wall Street is focused on chip stocks and trade agreements after President Trump hinted at a major trade deal and suggested he could lift certain restrictions on chip exports that hurt companies like Nvidia (NVDA).

Though that affects many countries, it also seems to warm the atmosphere ahead of weekend talks between the U.S. and China. There appears to be progress elsewhere, too, as Trump announced a trade agreement with a major country that The Wall Street Journal reported is the U.K. Stocks rose on the news, and "risk-on" sentiment reappeared in the crypto market and Magnificent Seven stocks. However, with roughly 60 days left before Trump's 90-day tariff extension ends and dozens of negotiations remaining, the "liberation day" scenario hasn't vanished and the uncertainty Powell cited is far from over.

"The big sticking point preventing the Fed from easing policy is lack of clarity around trade policy," said Kathy Jones, chief fixed income strategist at Schwab. "With the potential for tariffs to raise prices, the Fed's concern is that a temporary rise in inflation would become more persistent. Since the size and breadth of tariffs is still in flux, the Fed can't estimate what the impact will be on the economy."

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is higher by ~10 basis points to 4.375%.

The U.S. Dollar Index ($DXY) is higher by 0.50 to 100.11.

WTI Crude Oil (/CL) is higher by 2.60% to $59.58/barrel.

Gold prices have traded in a range of $3,325.40-$3,422.00, last seen trading lower by 0.85% to $3,363.20/oz.

Natural Gas prices have traded in a range of $3.567-3.723 and were last seen trading slightly higher to $3.622.

Bitcoin (BTC) is higher by ~3.01% over the past 24 hours to $99,989.46.

Shares of Carvana Co. (CVNA + $28.67 to $287.84) are trading near 52-week highs after the utility reported Q1 earnings of $1.51 per share, excluding non-recurring items ($0.79 beat) on revenue that rose 38.3% year-over-year to $4.23B (above the $4.00B FactSet consensus estimate). Regarding guidance, the company set a new objective to sell 3M retail units annually at an adjusted EBITDA margin of 13.5% over the next 5-10 years. Puts are slightly outnumbering calls, but the May 9^th 300.00 call is seeing the most action from traders (volume is 4,147).

Also trading to the upside this morning is Dave Inc. (DAVE + $37.25 to $145.08) after the neobank (digital-only bank) reported Q1 adjusted earnings of $2.48 per share ($1.07 beat) on revenue that rose 46.7% year-over-year to $108M (above the $92.8M FactSet consensus estimate). Additionally, the company announced a $50M share repurchase program and raised full-year 2025 (FY25) revenue guidance to a range of $460-475M from $415-435M. Calls are outnumbering puts ~3:2 with the May 16^th 85.00 call being the highest volume contract (volume is 201).

New 52-week highs (80 new highs today): Duolingo Inc. (DUOL + $7.86 to $503.42), MercadoLibre Inc. (MELI + $169.62 to $2,431.71), The Travelers Companies Inc. (TRV + $2.61 to $271.47)

Some unusual call activity (~33:1 calls over puts) is being seen in Eastman Chemical Co. (EMN + $2.53 to $77.80) which is primarily being driven by activity on the December 19^th 85.00 call. Volume on this contract is 3,027 versus open interest of 8, so it's likely that nearly all the volume represents new positioning. The bulk of the transactions consisted of various-sized blocks that were bought around the same time at the ask price of $5.50 each, which suggests bullish intent.

Shares of Shopify Inc. (SHOP - $3.44 to $91.06) are trading lower after the e-commerce platform reported a Q1 loss of $0.53 per share ($0.36 miss) on revenue that rose 26.8% year-over-year to $2.36B (above the $2.33B expected). Looking ahead, the company said it expects revenue to grow at a mid-twenties percentage rate from a year earlier. Calls are outnumbering puts ~4:3 with the May 23^rd 91.00 call being the highest volume contract (volume is 6,046).

Also trading to the downside this morning is Arm Holdings PLC (ARM - $6.69 to $117.50) after the semiconductor design firm beat quarterly estimates but issued downbeat guidance last night after the bell. The company reported fiscal Q4 non-GAAP earnings of $0.55 per share ($0.03 beat) on revenue of $1.24B (slightly above the $1.23B expected). However, the company said that Q1 non-GAAP EPS is expected to come in a range of $0.30-0.38 on revenue of $1.00-1.10B versus the respective $0.42 and $1.10B consensus estimates. Calls are outnumbering puts ~4:3 with the May 9^th 120.00 call leading the way (volume is 4,070).

New 52-week lows (83 new lows today): Conagra Brands Inc. (CAG + $0.09 to $23.09), Regeneron Pharmaceuticals Inc. (REGN - $21.54 to $539.39), Thermo-Fisher Scientific Inc. (TMO + $4.52 to $412.37)

Some unusual put activity (~5:2 puts over calls) is being seen in ICICI Bank Ltd. (IBN - $1.44 to $32.37) which is primarily being driven by activity on the June 20^th 31.00 put. Volume on this contract is 4,914 versus open interest of 596, 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 $0.35 each, which suggests bearish intent.

Verona Pharma PLC (VRNA - $0.60 to $68.54): Option volume is running at ~63x the daily average on this biopharmaceutical company which is primarily being driven by activity on the June 20^th 60.00 put. Volume on this contract is 10,333 versus open interest of 1,252, so we know that the volume primarily represents fresh positioning. The bulk of the transactions consisted of various mid-sized blocks that were bought around the same time at the ask price of $3.60 each, which suggests bearish intent.

Adient PLC (ADNT + $1.14 to $13.72): Option volume is running at ~30x the daily average on this maker of automotive seating systems and components which is primarily being driven by activity on the July 18^th 15.00 call. Volume on this contract is 2,986 versus open interest of 41, so it's likely that nearly all the volume represents fresh positioning. The bulk of the transactions consisted of various-sized blocks that were bought at various times for between $0.80-0.85 each, which suggests bullish intent.

Brookfield Corp. (BN + $1.93 to $57.82): Option volume is running at ~29x the daily average on this alternative asset and REIT management firm which is primarily being driven by a 10,130 contract block that was bought on the May 16^th 55.00 put for $0.25 when the bid/ask spread was $0.00 x $0.40 (open interest is 397). 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.

The Cboe Volatility Index (VIX - 1.22 to 22.33) has been on both sides of the unchanged line today (intraday range is 21.88-23.61), as equity markets are higher across the board around the midday mark (DJI + 547, SPX + 74, COMP + 314). VIX option volume is below average today as the index is currently missing from the "Top Volume by Underlying" list. The volume put/call ratio is currently 0.42, but the highest volume contract is the June 18^th 18.00 put (volume is 15,856 vs. open interest of 123,222).