Today's Options Market Update

The Federal Reserve is widely expected to cut rates today for the third straight meeting. Stocks flattened in early trading while the 10-year Treasury note yield posted a three-month high above 4.2%, possibly on concerns that lower rates could ignite more inflation. Questions heading into the decision include how many officials dissent, what the "dot plot" of rate projections shows, and the tone Fed Chairman Jerome Powell takes at the podium.

If Powell puts on his hawkish hat and warns of inflation after the anticipated 25-basis point rate cut at 2 p.m. ET, the market might have an ugly reaction. If Powell sounds dovish and leaves the door open for more cuts, that might support stocks, though reaction from the Treasury market could keep any rallies in check. The long end of the curve, which reflects future inflation and growth expectations, has extended its premium to shorter-term yields more directly connected to Fed policy. "I think the market's more likely to get a hawkish tone out of the Fed than a dovish tone," said Nathan Peterson, director of derivatives research and strategy, Schwab Center for Financial Research (SCFR).

The S&P 500 index barely moved Tuesday and has been rangebound between 6,800 and 6,850 so far this month, trading about 1% below its all-time high. Investors appear to seek direction from the Fed and today's post-close results from Oracle (ORCL). A "Santa Claus rally" can't be ruled out, but isn't a slam dunk, either, considering recent reluctance to test the October peak. "Bullish seasonality and potential performance chasing could be in play, but markets appear to want a strong economy, lower yields across the curve, an accommodative Fed, and a healthy AI secular growth story," Peterson said.

Make sure to check out our upcoming Schwab Market Outlook where you can get expert insights on market drivers and their potential impact on your portfolio. Please see the summary and link below.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is lower by 1 bps 4.17%.

The U.S. Dollar Index ($DXY) is unchanged at 99.10.

The CBOE Volatility Index^® (VIX) is up slightly by 0.83% to 17.09.

WTI Crude Oil (/CL) is lower by 0.82% to $57.77/barrel.

Bitcoin (BTC) is falling by 1.25% to $92,165.

Ethereum (ETH) is unchanged today at $3,335.

Shares of GE Vernova Inc. (GEV + $92.00 to $717.30) are up over 14.00%, trading at a new all-time high, after the power equipment company raised its 2026 financial guidance and boosted its share buybacks and dividends at its most recent investor day. For 2026, GE Vernova expects revenue of $41 billion to $42 billion and EBITDA margin of 11% to 13%, both in line with estimates, but the adjusted free cash flow of $4.5 billion to $5 billion well exceeded estimates for $3.2 billion. The company also upped its share buyback program to $10 billion from $6 billion and doubled its dividend to $0.50 per share.

GE Vernova touted its benefits from increasing U.S. demand for electricity driven by data centers, artificial intelligence and overall electrification of the economy. GEV shares have risen about 90% this year.

Analysts were very upbeat following the news, BMO Capital, B of A Securities, and RBC Capital all raising their price targets on the stock to $780, $804, and $761 respectively.

Option trading in GEV currently stands at 19,976 contracts, 16x the average daily volume with calls outpacing puts 2:1. Leading the way are the following trades, expirations, and strikes:

• January 16th, 2026, 600.00 call accounted for 621 contracts; open interest is 723 contracts.
• December 19th, 2025, 720.00 call accounted for 484 contracts; open interest is 279 contracts.
• December 12th, 2025, 687.50 call accounted for 403 contracts; open interest is 406 contracts.

New 52-week highs (108 new highs today): GE Vernova Inc. (GEV + $92.00 to $717.30), Nextdoor Holdings Inc. (NXDR + $0.62 to $2.63), Discovery Inc (WBD + $1.00 to $29.26), Echostar Corp. (SATS + $6.00 to $99.54), Ally Financial Inc. (ALLY + $2.45 to $44.79)

Unusual call activity is noted today in Cronos Group Inc. (CRON + $0.06 to $2.75), as call volume currently stands at 2,911 contracts, 6x the average daily volume and 150x the put volume. Activity is greatest in the January 21st, 2028, expiration month, specifically at the 5.50 strike call where over 2,700 contracts have traded, mostly on the buy side. Traders have used multiple block orders to scoop up the calls, paying $0.45 when the bid/ask was $0.40 x $0.45. With only 15 contracts of open interest, we know this represents new positioning (suggesting longer-term bullish intent). Remember, these 2028 contracts have an expiration of 772 days from today, so this might not indicate near-term bullishness.

Another name exhibiting unusual activity today is Ally Financial Inc. (ALLY + $2.45 to $44.79), as call volume has spiked to 14,169 contracts in morning trading, 17x the average volume. Traders are targeting December 19th, 2025 expiration month and appear to be selling the 47.00 strike calls through multiple block trades. They are collecting $0.25 on the sales when the bid/ask was $0.25 x $0.30. With open interest of 1,192, we know this represents new positioning (suggesting neutral to bearish intent). Shares of ALLY posted a new 52-week high price of $44.96 earlier this morning after the company announced a $2 billion share buyback plan.

Shares of AeroVironment Inc. (AVAV - $30.42 to $251.00) are down over 10% today after the drone maker announced second quarter adjusted EPS that was well below estimates and cut its yearly adjusted earnings per share outlook. AeroVironment generated revenues in the second quarter of $472.5 million, exceeding estimates, but added costs weighed heavily, pushing gross margins down to 22%, below estimates for 26.3%. This led, in part, to an adjusted EPS of $0.44, missing estimates of $0.76. The company also lowered its 2026 adjusted EPS to a range of $3.40 to $3.55, below its initial target of $3.60 to $3.75.

Price targets for AVAV shares are all over the map, with Needham maintaining its $450 price target, Citizens keeping its target at $400, and Cantor Fitzgerald lowering its price target to $315

Option trading in AVAV currently stands at 6,932 contracts in morning trading, on pace for 9x the daily average, with calls outpacing puts nearly 1.5:1. Leading the way are the following trades, expirations, and strikes:

• December 12th, 2025, 280.00 call accounted for 347 contracts; open interest is 102 contracts.
• December 12th, 2025, 270.00 call accounted for 257 contracts; open interest is 140 contracts.
• December 12th, 2025, 255.00 put accounted for 224 contracts; open interest is 85 contracts.

New 52-week lows (21 new lows today): Cracker Barrel (CBRL - $1.36 to $25.64), Kosmos Energy Ltd. (KOS - $0.05 to $1.02), The Campbell's Company (CPB - $0.49 to $27.98), Lakeland Industrial Inc. (LAKE - $6.55 to $8.46)

There is unusual put activity today in V F Corp. (VFC + $0.38 to $18.46). This activity equates to over 33,595 put contracts, 35x average daily put volume and 33x today's call volume. Most of the volume can be attributed to multiple block trades in the September 18th, 2026, expiration, specifically at the 10.00 strike put. While trading has been two-sided, most of the activity has been on the sell side, with prices averaging $0.55. There was already 21,529 contracts of open interest, so these traders could represent closing long positions or additions to short positions. Either way, this would suggest some form of neutral to bullish sentiment. Shares of VFC have nearly doubled since posting a 52-week low price of $9.41 on April 9th.

Unusual activity has also been detected in EQT Corp. (EQT - $0.87 to $57.65), as put volume stands at 29,654 contracts in morning trading, 30x average daily volume and 15x the call volume. Almost half of that volume stems from a large block trade in the January 23rd, 2026, expiration month. Traders bought 12,900 of the 51.00 strike puts for a price of $0.50 when the bid/ask was $0.13 x $0.85, so slightly above the midpoint. There was no open interest at the time, so this represents new positioning (suggesting bearish intent).

The Cboe Volatility Index (VIX + 0.16 to 17.09) is up slightly, by 0.83%, as equity markets are mixed in anticipation of the Fed announcement on rates (DJI + 161, SPX + 1, COMPX - 75). VIX movement has occurred within a narrow range today (the intraday range is 16.92 to 17.66). The highest volume contract is currently the February 18th, 2026, 55.00 call (volume is 80,000 vs. open interest of 93,695).