Today's Options Market Update

The spotlight shifted to Hollywood this morning where Netflix (NFLX) appeared to emerge the winner in bidding to buy Warner Bros Discovery (WBD). Stocks are higher in morning treading, led by the Communications sector, ahead of today's Personal Consumption Expenditures (PCE) price data and next week's Federal Reserve meeting. The S&P 500^® index is up slightly for the week and nearly 5% from the November 20 low, closing Thursday at its highest since October 29.

Investors should prepare for potential volatility when September PCE appears at 10 a.m. ET. Especially if it holds any surprises to the upside, though the data are dated due to the government shutdown. Consensus for headline PCE is 0.3%, equal to the August rise. Today's 10 a.m. data ledger also includes September personal spending and personal income, both of which could be too dated to have much impact, along with consumer sentiment. While PCE and sentiment data might provide near-term guideposts, the Fed still is driving in a fog—to use Fed Chairman Jerome Powell's term—without the November jobs report.

Wall Street had an uneventful Thursday, rising for the third straight session amid mixed performance from mega-caps. Though today's data could stir things up, trading might flatten again early next week ahead of the Federal Open Market Committee's (FOMC) rate decision Wednesday afternoon. Odds of a 25-basis-point rate cut are 87%, according to the CME FedWatch Tool. "The Fed doesn't tend to go against market odds when they're that extreme in one direction or another," said Liz Ann Sonders, chief investment strategist, Schwab Center for Financial Research (SCFR). "But it wouldn't surprise me if the commentary around a cut was somewhat similar to what happened at the October FOMC meeting when Powell was pretty quick to shoot down the notion that we could just continue to anticipate cuts at every meeting."

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 higher by 3 bps 4.14%.
• The U.S. Dollar Index ($DXY) is unchanged at 98.98.
• The CBOE Volatility Index^® (VIX) is down 1.27% to 15.58.
• WTI Crude Oil (/CL) is higher by 0.82% to $60.16/barrel.
• Bitcoin (BTC) is falling by 3.25% to $89,830.
• Ethereum (ETH) is down by 3.08% today to $3,053.

Shares of Ulta Beauty Inc. (ULTA + $71.37 to $605.32) are up over 13.00%, trading at a new all-time high, after the cosmetics retailer reported better than expected third quarter earnings estimates and boosted its earnings per share guidance for the full year. In the third quarter, Ulta saw net sales increase by 12.9% to $2.9 billion, primarily due to increased comparable sales, the acquisition of Space NK, and net new store contribution. Net income was $230.9 million with EPS coming in at $5.14, topping analysts' estimates for $4.61.

Going forward, Ulta now expects comparable sales to be up as much as 4.7% in the current fiscal year, coming in around $12.3 billion for full-year 2025, up from its previous range of $12 billion to $12.1 billion. The company also raised its outlook for earnings per share.

Analysts were very upbeat following the news, with Telsey Advisory, DA Davidson, and Baird all raising their price targets on the stock to $610, $625, and $670 respectively.

Option trading in ULTA currently stands at 23,933 contracts, 17x the average daily volume with calls outpacing puts nearly 2:1. Leading the way are the following trades, expirations, and strikes:

• December 5th, 2025, 600.00 call accounted for 2,100 contracts; open interest is 746 contracts.
• December 5th, 2025, 620.00 call accounted for 2,065 contracts; open interest is 543 contracts.
• December 5th, 2025, 610.00 call accounted for 1,756 contracts; open interest is 308 contracts.

New 52-week highs (275 new highs today): Ulta Beauty Inc. (ULTA + $71.37 to $605.32), Discovery Inc. (WBD + $0.56 to $25.11), Uipath Inc (PATH + $0.06 to $18.54), Rivian Automotive Inc. (RIVN + $0.27 to $18.32)

Unusual call activity is noted today in the First Industrial Realty Trust REIT (FR + $0.83 to $57.60), as call volume currently stands at 20,155 contracts, 6,000x the average daily volume and 5,000x the put volume. Activity is greatest in the March 20th, 2026, expiration month, due to 10,000 call vertical spreads (20,000 options total) that were purchased. Traders bought the 60.00 strike and sold the 70.00 strike calls in a single block transaction for $2.00 each when the bid/ask was $0.05 x $3.70. The wide bid/ask spread represents the lack of liquidity as there were only 52 contracts of open interest. This suggests new positioning and a bullish bias. Shares of FR appear to be breaking out to the upside from a recent wedge pattern.

Another name exhibiting unusual activity today is Digital Bridge Group (DBRG + $3.78 to $13.50), as call volume has spiked to 18,707 contracts in morning trading, 85x the average volume. We've seen heavy activity, primarily on the buy side, in both the December 19th, 2025, and January 16th, 2026 expiration months. Strikes of particular interest are the January 16th 10.00, 12.00, and 17.00 strike calls where over 5,200 contracts have traded through multiple blocks. Shares of DBRG are up over 40.00% today after reports surfaced that Softbank is in talks to acquire Digital Bridge and take the company private.

Shares of SoFi Technologies Inc. (SOFI - $2.38 to $27.22) are down around 8% today after the fintech company announced a $1.5 billion stock offering, following a similar move back in July. Per the announcement, SoFi is offering shares for $27.50 to $28.50 each, representing a discount of as much as 7.1% to Thursday's close of $29.60. The offering is expected to close on December 8th. SoFi said it intends to use the proceeds for purposes including enhancing its capital position and new business opportunities.

Investors may be focusing on the near-term dilution of shares, but there have been reports, most recently by Barron's, that the timing of the announcement could portend SoFi's inclusion in the S&P 500. The S&P 500's quarterly rebalancing gets announced later this afternoon. When a stock joins the S&P 500, every index fund and ETF tracking the benchmark must purchase it, sometimes generating a price spike, known as the "inclusion bounce."

Option trading in SOFI currently stands at 341,713 contracts in morning trading, on pace for 11x the daily average, with calls outpacing puts nearly 2:1. Leading the way are the following trades, expirations, and strikes:

December 12th, 2025, 26.00 put accounted for 17,895 contracts; open interest is 18,744 contracts.

December 12th, 2025, 23.00 put accounted for 14,739 contracts; open interest is 2,743 contracts.

December 5th, 2025, 28.00 call accounted for 13,341 contracts; open interest is 5,297 contracts.

New 52-week lows (29 new lows today): Sentinel One Inc. (S - $2.21 to $14.76), Cinemark Holding Inc. (CNK - $1.87 to $21.99), Li Auto Inc. (LI - $0.69 to $17.41), Linde (LIN - $2.77 to $400.96)

There is unusual put activity today in Danaher Corp. (DHR - $0.01 to $227.12). This activity equates to over 1,77 put contracts, 4x average daily put volume and 30x today's call volume. Most of the volume can be attributed to two large block trades in the January 23rd, 2026, expiration, specifically at the 210.00 strike put. Traders bought 1,650 contracts, paying an average price of $3.25 when the bid/ask was $1.00 x $3.80. There was no previous open interest, so this represents a new position (suggesting bearish intent). Shares of DHR have rallied over 25% since late September when the shares dropped to around $180.00.

Unusual activity has also been detected in Praxis Precision Medical (PRAX + $70.90 to $260.87), as put volume stands at 2,962 contracts in morning trading, 230x average daily volume and 7x the call volume. Half of that volume stems from a 1x2 put ratio that traded in the January 21st, 2018, expiration month. Traders appear to have purchased 500 of the 200.00 strike puts and financed that purchase with the sale of 1,000 of the 130.00 strike puts. The overall trade resulted in a debit of $3.00 (x 500 contracts x 100 multiplier, excluding commissions). This is likely a bearish trade that takes advantage of the high implied volatility in the options prices. Shares of PRAX have exploded recently, more than quadrupling in the past two months, following positive updates from two of its clinical programs.

The Cboe Volatility Index (VIX - 0.20 to 15.58) is down this morning by 1.27%, as equity markets are higher across the board (DJI + 105, SPX + 12, COMPX + 85). VIX movement has occurred within a narrow range today (the intraday range is 15.53 to 16.18). The highest volume contract is currently the January 21st, 2026, 17.00 put (volume is 63,780 vs. open interest of 220,790).