Today's Options Market Update

Markets are lower across the board rose midday Thursday as investors digested a private report that showed layoffs in October hit the highest rate for the month in more than two decades. The results bolstered the case for a Federal Reserve rate cut in December despite Chairman Jerome Powell's unexpectedly hawkish tone following the Fed meeting last month.

The report from outplacement firm Challenger, Gray & Christmas painted a grim picture of the jobs market a day after a stronger-than-expected report from ADP. Challenger reported 153,000 layoffs in October due to cost-cutting and AI. Hiring slowed to a 14-year low. Year to date, this has been the worst year for layoffs since 2020, when the labor market was decimated by COVID-19. The CME Group's FedWatch gauge rebounded 5.5 points from Wednesday to reflect 67.5% chances of a rate cut next month. And Treasury yields retreated from yesterday's sharp gains.

Major indexes bounced back Wednesday from Tuesday's AI-related selloff,but finished slightly off their midday highs. Semiconductors climbed 3% as a sector and erased much of the previous day's losses. A sharp rally in Treasury yields coincided with a slight backtrack in chances of a Federal Reserve rate cut next month. The market appeared to gain support from yesterday's arguments at the Supreme Court on President Trump's tariffs. Justices seemed skeptical of the administration's stance.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is lower by six basis points to 4.09%.

The U.S. Dollar Index ($DXY) is lower by 0.39 to 99.80.

WTI Crude Oil (/CL) is lower by ~1.07% to $58.96/barrel.

Gold prices have traded in a range of $3,973.20-$4,028.70 and were last seen trading lower by ~0.12% to $3,988.20/oz.

Natural Gas prices have traded in a range of $4.23-4.338 today and were last seen trading higher by 1.91% to $4.313.

Bitcoin (BTC) is lower by ~1.79% to $102,041.50 today.

Shares of Datadog Inc. (DDOG + $31.33 to $186.31) are gapping up near three-year highs this morning after the observability and security platform operator reported Q3 adjusted earnings of $0.55 per share ($0.09 beat) on revenue that rose 28.35% year-over-year (YoY) to $885.651M (above the $852.781M consensus estimate). The company also issued upside guidance as Q4 adjusted EPS is expected to come in a range of $0.54-0.56 on Q4 revenue that is expected to come in a range of $912-916M, above the respective $0.46 & $887.27M consensus estimates. Calls are outnumbering better than 2:1 with the November 7^th 200.00 call seeing the most action from traders (volume is 9,076).

Also trading to the upside this morning is Cummins Inc. (CMI + $31.51 to $470.69) after the U.S. truck engine maker reported Q3 adjusted earnings of $5.59 per share ($0.78 beat) on revenue that decreased 2% YoY to $8.32B (above the $7.98B expected). The company said that it is not providing financial guidance for the remainder of 2025 due to market uncertainty. Calls are outnumbering puts roughly 2:1 with the November 21^st 500.00 call being the highest volume contract (volume is 217).

New 52-week highs (110 new highs today): Coherent Corp. (COHR + $21.65 to $156.28), Micron Technology Inc. (MU + $1.53 to $238.90), Parker-Hannafin Corp. (PH + $55.11 to $829.26)

Some unusual call activity (~10:1 calls over puts) is being seen in Canada Goose Holdings Inc. (GOOS - $2.51 to $11.64) as option traders primarily target the November 14^th 12.00 call. Volume on this contract is 4,013 versus open interest of 0, so we know that all the volume represents new positioning (assuming no day trades). The majority of the transactions consisted of various-sized blocks that were bought at various times for between $0.35-0.55 each (including a 1,700 contract block that was bought for $0.50 when the bid/ask spread was $0.25 x $0.55), which suggests bullish intent. Shares of GOOS are trading ~17% lower this morning after reporting disappointing quarterly results.

Shares of Vistra Corp. (VST - $7.08 to $182.31) are trading lower this morning after the integrated retail electricity and power generation company reported Q3 GAAP net income of $652M (below the FactSet consensus estimate of $919.6M) on Q3 revenue of $4.971B (below the $6.12B FactSet consensus estimate). The company’s board of directors authorized an additional $1B increase to its existing share buyback program. Calls and puts are trading roughly even with the December 19^th 140.00 put being the highest volume contract (volume is 5,178).

Also trading to the downside this morning is Doordash Inc. (DASH - $36.56 to $201.44) after the food delivery firm reported Q3 earnings of $0.55 per share ($0.13 miss) on revenue that increased 27% YoY to $3.45B (above the $3.35B FactSet estimate). DASH received multiple analyst price target cuts following the results. Puts are outnumbering calls ~3:2 with the November 21^st 190.00 put leading the way (volume is 3,144).

New 52-week lows (173 new lows today): Adobe Systems Inc. (ADBE - $8.01 to $327.52), Clorox Company (CLX - $0.65 to $108.27), Duolingo Inc. (DUOL - $76.53 to $183.49)

Some unusual put activity (~7:1 puts over calls) is being seen in Tower Semiconductor Ltd. (TSEM - $1.97 to $85.09) which is primarily being driven by a 5,020 contract block that was bought on the November 21^st 80.00 put for $3.10 when the bid/ask spread was $1.50 x $4.60 (open interest is 1,493). 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 trades took place above the midpoint of the bid/ask spread.

Mineralys Therapeutics Inc. (MLYS - $2.37 to $37.28): Option volume is running at over 200x the daily average on this clinical-stage biopharmaceutical company which is primarily being driven by a couple of large blocks that simultaneously traded on the November 21^st expiration earlier this morning:

• 35.00 put (open interest is 509): A 4,000 contract block was bought for $2.38 when the bid/ask spread was $0.05 x $2.50.
• 25.00 put (open interest is 250): A 4,000 contract block was sold for $0.33 when the bid/ask spread was $0.00 x $4.90.

We know that these blocks are new positions based on the respective open interest figures, and it appears that a $10.00-wide bear put spread was established for a net debit of $2.05 (x 4K contracts x 100 multiplier, excluding commissions). The positioning suggests that the block trader believes that MLYS will close below the break-even price of $32.95 at expiration.

Chimera Investment Corp. (CIM - $0.77 to $12.21): Option volume is running at over ~100x the daily average on this real estate investment trust (REIT) which is primarily being driven by a couple of large blocks that simultaneously traded on the June 2026 expiration earlier this morning:

• 12.00 put (open interest is 509): A 1,000 contract block was bought at the ask price of $1.21.
• 10.00 put (open interest is 250): A 2,000 contract block traded for $0.41 when the bid/ask spread was $0.35 x $0.45.

We know that these blocks are new positions based on the respective open interest figures, and it appears (since the trade on the 12.00 put took place at the ask price) that a $2.00-wide put front spread was established for a net debit of $0.39 (x 1K contracts x 100 multiplier, excluding commissions). The positioning suggests that the block trader believes that CIM will close below the break-even price of $11.61 at expiration.

Fastly Inc. (FSLY + $2.29 to $10.36): Option volume is running at ~17x the daily average on this edge cloud platform operator which is primarily driven by a 2,500 contract block that was bought on the December 19^th 12.50 call for $0.34 when the bid/ask spread was $0.30 x $0.35 (open interest is 2,090). 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 + 1.91 to 19.92) has been on both sides of the unchanged line today (intraday range is 17.64-20.27), as equity markets are lower across the board around the midday mark (DJI - 442, SPX - 72, COMP - 437). VIX option volume is average today at 391,975 contracts, and the volume put/call ratio is currently 0.84.