Today's Options Market Update

Major indexes slipped early on weak jobs data as investors braced for tariff and budget deadlines. Private-sector job growth fell 33,000 in June, the first decline in more than two years, according to the ADP National Employment Report. Analysts had expected a 100,000 increase. Softness in services sector jobs and at smaller businesses capsized the data. "Tomorrow's nonfarm payrolls report will be more important, but this suggests the labor market is softening," said Kathy Jones, chief fixed income strategist at Schwab.

In Washington, the House needs to vote on the Senate version of the budget bill passed Tuesday, hoping to send it to the president by Friday. But passage isn't a slam dunk. "The Senate changes to the bill that the House passed in May are substantial," said Michael Townsend, managing director of legislative and regulatory affairs at Schwab, "and both conservatives and moderates have concerns. But intense pressure from the White House is likely to push the bill across the finish line." Also, the 90-day "reciprocal" trade deadline is next Wednesday and Barron's reported President Trump threatened Japan with tariffs of between 30% and 35%.

Tesla (TSLA) is expected to report second quarter deliveries today, with consensus around 393,000. That's down 11% from a year ago but up 17% from the first quarter. Tesla was among many mega-caps losing ground yesterday as the new quarter began. Investors veered away from big tech and the Magnificent Seven but piled into health care, materials, and small caps. The S&P 500 index slipped and the tech-heavy Nasdaq Composite ($COMP) suffered moderate losses Tuesday. Meanwhile, Treasury yields swung higher this morning despite the weak jobs data, possibly on worries the budget bill could increase U.S. debt.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is higher by 6 basis point to 4.30%.

The U.S. Dollar Index ($DXY) is up slightly to 96.87.

The CBOE Volatility Index^® (VIX) is down 0.59% to 16.73.

WTI Crude Oil (/CL) is higher by 2.00% to $66.71/barrel.

Bitcoin (BTC) is up by 4.31%, trading at $110,320.

Ethereum (ETH) is higher by 6.43% today to $2,572.

Shares of Tesla Inc. (TSLA + $12.78 to $313.49) are up over 4% today, after the EV carmaker posted a 13% decline in quarterly vehicle sales, which was less drastic than the whisper number projected. The company delivered 384,122 vehicles during the last three months, and some investors were braced for a more than 20% plunge. Tesla produced over 25,000 more vehicles than it delivered to customers for the second quarter in a row, suggesting the company may be overestimating demand. The company had been counting on a boost in the quarter from the redesigned Model Y sport utility vehicle, by far its most important product. Tesla could face additional headwinds if Congress passes the president's multitrillion-dollar spending bill that would eliminate tax credits for EV purchases.

A positive for the company is the return of Elon Musk to its daily operations. Musk announced he will be taking on more oversight of the company's car business following the departure of Omead Afshar, who was responsible for Tesla's sales and manufacturing operations in North America and Europe. Tesla's sales operations in the US and Europe will now report up to Musk, per Bloomberg.

Option trading in TSLA currently stands at 1,904,931 contracts, 13x the daily average, with call outpacing puts 2:1. Leading the way are the following trades, expirations, and strikes:

• July 3rd, 2025, 315.00 call accounted for 107,058 contracts; open interest is 6,715 contracts.
• July 3rd, 2025, 320.00 call accounted for 95,164 contracts; open interest is 16,100 contracts.
• July 3rd, 2025, 300.00 put accounted for 91,797 contracts; open interest is 20,890 contracts.

New 52-week highs (146 new highs today): Mogo Inc. (MOGO + $1.35 to $2.56), Carnival Corp. (CCL + $0.60 to $29.24), Bank of America Corp. (BAC + $0.39 to $48.54), Citigroup Inc. (C + $0.20 to $86.47)

Unusual call activity is noted today in Peabody Energy Corp. (BTU + $1.22 to $14.40), as call volume currently stands at 40,473 contracts, 18x the average daily volume. Most of the activity can be attributed the July 3rd, 2025, expiration month, specifically at the 15.00 strike, where volume has exceeded 29,500 contracts. While the action has been two-ways, most of the activity has been on the buy side, with prices ranging from $0.06 to $0.08, pushing the 90-day implied volatility up to 59.55%. Given the share price of BTU is up 10% today, these 15.00 calls are ~4% higher than the current price and would need some upside to get in the money by tomorrow's expiration. We know this represents new positioning, given the open interest of 244 contracts (suggesting bullish sentiment).

Another name exhibiting unusual activity today is the Invesco Solar ETF (TAN + $2.06 to $37.30), as call volume has spiked to 14,246 contracts in morning trading, 18x daily average. Nearly 2/3 of that volume comes from the July 18th, 2025, expiration where traders are rolling up their long call positions of 4,000 contracts from the 35.00 strike up the 37.00 strike, through large block vertical call trades, collecting a credit of $1.20 in the process. This type of transaction allows traders to maintain a bullish position while reducing some delta risk as well as their cash outlays. Traders are also buying the 38.00 strike through multiple block trades paying at or near the offer on over 2,000 contracts today. Some of this bullish sentiment could be a carryover from yesterday's Senate passing of its tax-and-spending bill that scrapped a proposed excise tax on renewable energy projects.

Shares of Centene Corp. (CNC - $22.50 to $34.15) are down a whopping 39% today, the most intraday since July 2006, in morning trading after the health insurance company pulled its 2025 guidance following weaker-than-expected market trends, resulting in earnings headwind of as much as $1.8 billion. Centene is reporting that preliminary data from 22 states showed an adjustment to compensate insurers for taking on sicker patients would fall short of its expectations, cutting $2.75 per share from its adjusted annual earnings, per Bloomberg.

In April, Centene forecasted adjusted earnings for the year exceeding $7.25 a share and total revenue of between $178.5 billion and $181.5 billion. Given the current update, that forecast could be in jeopardy.

Option trading in CNC currently stands at 59,214 contracts in early morning trading, on pace for 50x the daily average, with calls outpacing puts 1.5:1. Leading the way are the following trades, expirations, and strikes:

• July 3rd, 2025, 40.00 call accounted for 4,630 contracts; open interest is 0 contracts.
• August 15th, 2025, 37.50 call accounted for 4,104 contracts; open interest is 0 contracts.
• July 11th, 2025, 40.00 call accounted for 3,3833 contracts; open interest is 0 contracts.

New 52-week lows (10 new lows today): Centene Corp. (CNC - $22.50 to $34.15), Molina Healthcare Inc. (MOH - $61.29 to $244.96), Vci Global Ltd. (VCIG - $0.64 to $1.73), Oragenics Inc. (OGEN - $0.09 to $1.46)

Some unusual put activity is noted today in Transocean Ltd. (RIG + $0.06 to $2.72). This activity equates to over 14,816 put contracts, 27x average daily put volume. Nearly all the activity stems from put selling in the December 19th, 2025, expiration month, at the 2.00 strike. Traders have sold a total of 14,734 contracts, at an average price of $0.14 when the bid/ask was $0.14 x $0.15. Coming into today, there was substantial open interest at the strike of 11,448 contracts, but given the size of these trades, it may be assumed that traders are adding to their short positions (suggesting neutral to bullish intent). We will know more tomorrow when the open interest is updated. Shares of RIG have rallied from their April 7th low price of $1.97 but are still well below their 52-week high price of $5.98, set back in last July.

Another example of unusual put activity occurred today in TG Therapeutics Inc. (TGTX + $0.70 to $36.10), as put volume stands at 3,478 contracts in morning trading, 15x average daily volume. Activity is highest in the August 15th, 2025, expiration, particularly at the 33.00 strike where traders have bought a total of 2,068 contracts, through multiple block trades, for an average price of $2.30 when the bid/ask was $2.20 x $2.35. These trades appear to either be new positions or additions to current long put holdings, as the open interest stands at 1,821 contracts (suggesting bearish intent). Shares of TGTX are down over 22% from their recent May 1st high, so traders may be anticipating further downside moves ahead.

The Cboe Volatility Index (VIX - 0.10 to 16.73) is down 0.59% in morning trading, as equity markets are marginally higher across the board (DJI + 43, SPX + 18, COMPX + 98). VIX movement has occurred within a narrow range today (the intraday range is 16.70 – 17.37). The highest volume contract is the July 16th, 2025, 24.00 call (volume is 32,665 vs. open interest of 105,192).