Today's Options Market Update

Stocks, Treasuries and the dollar stumbled today after the U.S. Justice Department opened a probe into Federal Reserve Chairman Jerome Powell over the Fed's office building renovation project. In a video response, Powell called the renovation focus a pretext and added, "This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation." New worries about Fed independence unnerved investors, and volatility surged.

"This is another attempt by the president to force out Powell and/or other members of the Fed," said Kathy Jones, chief fixed income strategist at the Schwab Center for Financial Research (SCFR). "Even though Powell's term is up in May, the president has made no secret of his desire to replace Powell with someone who will lower interest rates. To the extent that it gets traction, it is likely counterproductive. Attempts to weaken the independence of the Fed undermine the dollar and the Treasury market. We can see some steepening of the Treasury yield curve this morning as yields move up."

A second source of early pressure is President Trump's weekend proposal to cap credit card rates for one year at 10%. Bank and credit card shares took the brunt of the blow. All this got the week started on a sour note after stocks hit record highs Friday and before an obstacle course the next few days dominated by Fed speakers, inflation data, and the start of earnings season with JPMorgan Chase (JPM) early tomorrow. A 10-year Treasury note auction looms today with results due this afternoon—an early chance for buyers to weigh in on the Powell news—and analysts see tomorrow morning's December Consumer Price Index up 0.3% monthly and 2.7% annually.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is higher by nearly 2 basis points to 4.189%.

The U.S. Dollar Index ($DXY) is lower by 0.297 to 98.836.

WTI Crude Oil (/CL) is lower by 0.08% to $59.07/barrel.

Gold prices have traded in a range of $4,520.80-$4,638.20 and were last seen trading higher by ~2.88% to $4,630.60/oz.

Natural Gas prices have traded in a range of $3.182-3.31 today and were last seen trading higher by 4.20% to $3.302.

Bitcoin (BTC) is higher by ~0.89% to $91,656.26 today.

Shares of Dow-member Walmart Inc. (WMT + $3.49 to $118.02) are moving higher this morning following news that the retail giant will partner with Alphabet’s AI model, Gemini, to help make the shopping experiences at Walmart and Sam’s more personalized and convenient for customers. Separately, the Nasdaq announced late Friday that Walmart will replace AstraZeneca in the Nasdaq 100 index beginning January 20th, 2026. Calls are outpacing puts ~3:1 with the January 16^th 118.00 call being the highest volume contract (volume is 14,985).

Also trading to the upside this morning is Albemarle Corp. (ALB + $5.80 to $167.09) after Scotiabank upgraded the lithium producer to “Sector Outperform” from “Sector Perform” and hiked their price target on the stock to $200.00 from $85.00. Scotiabank analyst Ben Isaacson believes that lithium has only experienced the “first leg” of a multi-year tightening cycle and increased his price forecasts on lithium. Calls are slightly outnumbering puts with the June 18^th 185.00 call leading the way (volume is 501).

New 52-week highs (188 new highs today): Applied Materials Inc. (AMAT + $5.15 to $306.33), Lockheed Martin Corp. (LMT + $4.27 to $547.19), Micron Technology Inc. (MU + $0.53 to $345.62)

Some unusual call activity (~10:1 calls over puts) is being seen in Pure Storage Inc. (PSTG + $5.19 to $72.17) which is primarily driven by activity on the March 20^th 95.00 call. Volume on this contract is 2,375 versus open interest of 383, so we know that the activity primarily represents new positioning. The bulk of the transactions consisted of various-sized blocks that were bought around the same at the ask price of $1.55 each, which suggests bullish intent. 

Shares of Abercrombie & Fitch Co. (ANF - $23.62 to $101.25) are under pressure this morning after the retailer narrowed its fiscal guidance earlier this morning. The company said that Q4 EPS is now expected to come in a range of $3.50-3.60 (from $3.40-3.70) on Q4 net sales that are expected to increase ~5% year-over-year (vs. prior guidance of 4-6%). For the full-year, ANF said net sales growth is expected to be “at least 6%” (vs. prior guidance of 6-7%). Puts are slightly outnumbering calls with the January 16^th 85.00 put being the highest volume contract (volume is 2,263).

Also trading to the downside today are credit card stocks after U.S. President Trump called for a one-year 10% cap on credit card interest rates starting January 20th in a Truth Social post late Friday. Trump said that he will no longer “let the American public be ripped off by credit card companies that are charging interest rates of 20-30%”. Trump also noted that failure to cap rates at 10% by January 20^th will be treated as a “violation of the law”. Shares of American Express Co. (AXP - $16.76 to $358.85), Capital One (COF - $17.61 to $231.59), MasterCard (MA - $11.38 to $564.17) and Visa Inc. (V - $5.82 to $343.95) are selling off on the news.

New 52-week lows (51 new lows today): Bellring Brands Inc. (BRBR - $1.32 to $23.50), GoDaddy Inc. (GDDY - $0.95 to $112.59), Wix.com Ltd. (WIX - $3.09 to $92.75)

Some unusual put activity is being seen in Delta Air Lines Inc. (DAL - $1.85 to $70.64) which is primarily driven by two large blocks (3,440 & 3,070) that were bought around the same time on the February 20^th 67.50 put for $2.53 when the bid/ask spread was $2.42 x $2.58 (open interest is 1,839). We know that these blocks are new positions based on the open interest figure, and we can assume that the intent is bearish in nature since both trades took place above the midpoint of the bid/ask spread.

Smurfit Westrock PLC (SW - $0.27 to $42.71): Option volume is running at ~16x the daily average on this maker of containerboard, corrugated containers and paper-based packaging products which is primarily driven by a 2,380 contract block that was bought on the February 20^th 50.00 call for $0.42 when the bid/ask spread was $0.20 x $0.60 (open interest is 9). 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.

Standard Lithium Ltd. (SLI + $0.20 to $5.18): Option volume is running at ~14x the daily average on this lithium producer which is primarily driven by a 5,000 contract block that was bought on the July 17^th 10.00 call at the ask price of $0.65 (open interest is 243). 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 at the ask price.

Amprius Technologies Inc. (AMPX + $0.62 to $10.10): Option volume is running at ~8x the daily average on this lithium-ion battery maker as option traders primarily target the February 20^th 12.00 call. Volume on this contract is 14,029 versus open interest of 1,376, so we know that the volume primarily represents new positioning. The majority of the transactions consisted of various-sized blocks that were bought at various times for between $0.65--$0.75 each, which suggests bullish intent. 

The Cboe Volatility Index (VIX + 0.67 to 15.16) has been in positive territory all day today (the intraday range is 15.16-16.66), as equity markets are mixed around the midday mark (DJI - 92, SPX + 3, $COMP + 67). VIX option volume is average today at 367,496 contracts, and puts are slightly outnumbering calls so far today.