Today's Options Market Update

A long cold war between the U.S. and Iran turned hot over the weekend and Wall Street reacted with a collective shrug. Crude oil (/CL) surrendered overnight gains and stocks recovered most of their earlier losses as the opening bell neared. While the market didn't seem overly fazed, the U.S. dollar and Treasuries gained, sometimes a sign of investors embracing perceived safety. Volatility also ticked up. Crude might ultimately tell today's tale. It's subdued for now but up around 20% over the last month.

Even without Middle East worries, Wall Street faces a possibly volatile week. Federal Reserve Chairman Jerome Powell is back in the spotlight tomorrow and Wednesday testifying to Congress. Friday features May Personal Consumption Expenditures (PCE) prices, the inflation data most closely followed by the Fed. Also, earnings pick up with KB Home (KBH), Nike (NKE), Micron (MU), and FedEx (FDX) on tap. It starts with KB Home later today, while commentary from FedEx could be scrutinized for potential insights on business and consumer sentiment.

The S&P 500 index just fell three straight days and lost ground overall last week as investors digested a Fed that didn't promise rate trims anytime soon. Many Fed speakers loom today and this week. Market momentum seems to be fading, judging from a decline in the relative strength index (RSI) and declining breadth. And 30- and 90-day hedging activity recently picked up, a sign that investors might see turbulence ahead. Recent bullish momentum has transitioned into sideways consolidation.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is lower by ~6 basis points to 4.312%.

The U.S. Dollar Index ($DXY) is lower by 0.04 to 98.67.

WTI Crude Oil (/CL) is lower by 0.89% to $73.18/barrel.

Gold prices have traded in a range of $3,400.90-$3,476.30, last seen trading lower by 1.14% to $3,413.50/oz.

Natural Gas prices have traded in a range of $3.706-3.949 and were last seen trading lower by 3.33% to $3.719.

Bitcoin (BTC) is higher by ~1.00% today to $101,984.80.

Shares of Tesla Inc. (TSLA + $31.40 to $353.56) are trading higher this morning following the company's launch of Robotaxi rides in Austin, Texas over the weekend. Tesla deployed a limited fleet of its self-driving taxis within a geofenced area picking up paying passengers and the roll out was viewed positively by analysts. Wedbush analyst Dan Ives took multiple rides and said the experience exceeded his expectations, noting that the experience was "indistinguishable that the car was driverless". Calls are outnumbering puts ~2:1 with the June 27^th 350.00 call seeing the most action from traders (volume is 98,360).

Also trading to the upside this morning is Advanced Micro Devices Inc. (AMD + $2.15 to $130.39) after Melius Research upgraded the chip maker to "Buy" from "Hold" and hiked their price target on the stock to $175 from $110. Analysts at Melius Research cited confidence in the company's positioning in the AI inferencing market and believe they can maintain a performance edge over rival Intel for at least two years. Calls are outnumbering puts ~2:1 with the June 27^th 135.00 call being the highest volume contract (volume is 39,478).

New 52-week highs (65 new highs today): DoorDash Inc. (DASH + $8.95 to $229.41), Roblox Corp. (RBLX + $2.18 to $104.27), Talen Energy Corp. (TLN + $4.29 to $292.95)

Some unusual call activity (~100:1 calls over puts) is being seen in Textron Inc. (TXT + $0.10 to $77.08) as option traders primarily target the September 19^th 85.00 call. Volume on this contract is 2,080 versus open interest of 94, so it's likely that nearly all the volume represents new positioning. The bulk of the activity consisted of various-sized blocks that were bought around the same time at the ask price of $1.40 each, which suggests bullish intent.

Shares of Hims & Hers Health Inc. (HIMS - $19.57 to $44.65) are under pressure following news that Danish drugmaker Novo Nordisk (NVO - $4.07 to $69.70) said that direct access to its weight loss drug, Wegovy, will no longer be available on the telehealth's platform via NovoCare Pharmacy. Back in April the two companies announced a collaboration to sell Wegovy through HIM's platform through a bundled offer with a membership. HIMS calls and puts are trading roughly even with the June 27^th 45.00 put leading the way (volume is 22,115).

Also trading to the downside this morning is Equifax Inc. (EFX - $2.29 to $253.41) after Bank of America downgraded the data analytics firm to "Neutral" from "Buy" and trimmed their price target on the stock to $285.00 from $300.00. Analysts at Bank of America said they underwhelmed by the company's Investor Day and lowered their adjusted EPS estimates for 2025 and 2026. Option volume is relatively light with the August 15^th 200.00 put being the highest volume contract (volume is 3).

New 52-week lows (90 new lows today): Cable One Inc. (CABO - $3.60 to $124.60), Centene Corp. (CNC - $0.53 to $53.87), Lululemon Athletica Inc. (LULU - $3.46 to $224.01)

Some unusual put activity (~8:1 puts over calls) is being seen in Grindr Inc. (GRND - $0.45 to $22.14) as option traders primarily target the July 18^th 23.00 put. Volume on this contract is 1,911 versus open interest of 67, so it's likely that nearly all the volume represents new positioning. The bulk of the activity consisted of various-sized blocks that were bought around the same time at the ask price of $1.15 each, which suggests bearish intent.

O-I Glass Inc. (OI + $0.11 to $14.13): Option volume is running at ~213x the daily average on this maker of glass containers which is primarily being driven by a 3,200 contract block that was bought on the December 19^th 16.00 call for $1.35 when the bid/ask spread was $1.10 x $1.50 (open interest is 4). 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.

Canada Goose Holdings Inc. (GOOS + $0.02 to $11.22): Option volume is running at ~26x the daily average on this maker of performance luxury outerwear apparel which is primarily being driven by a 2,500 contract block that was sold on the October 17^th 11.00 put for $1.05 when the bid/ask spread was $1.00 x $1.15 (open interest is 121). We know that this block is a new position based on the open interest figure and we can assume that the block trader believes that GOOS will close above the $11.00 price level and/or is comfortable taking a long 250,000 share position in the stock at an effective purchase price of $9.95 if GOOS closes below $11.00 at expiration.

Zeta Global Holdings Corp. (ZETA + $2.17 to $16.35): Option volume is running at ~18x the daily average on this software company which is primarily being driven by activity on the July 18^th 20.00 call. Volume on this contract is 9,420 versus open interest of 74, so we know that the volume primarily represents fresh positioning. The bulk of the transactions consisted of various-sized blocks that were bought at various times for anywhere between $0.20-1.15 each, which suggests bullish intent.

The Cboe Volatility Index (VIX + 0.36 to 20.98) has been on both sides of the unchanged line today (intraday range is 20.00-21.88), as equity markets are higher around the midday mark (DJI + 26, SPX + 13, COMP + 51). 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 0.75, but the highest volume contract is the July 16^th 17.50 put (volume is 31,529 vs. open interest of 36,566).