Today's Options Market Update

Three weeks after "liberation day," President Trump soothed investor tensions on trade and the Federal Reserve. Stocks, led by technology, are soaring while Treasury yields dip. The trade war is far from over, but Trump indicated wiggle room on tariffs against Chinese imports and said he doesn't plan to fire Fed Chairman Jerome Powell. Trump's backtrack lifted a weight on Wall Street that had this month on pace to be the worst April for stocks since 1932, and overshadowed Tuesday's dismal first quarter results from Tesla (TSLA).

"It seems that the president has gotten the message—perhaps from the markets—that trade wars and threatening to remove the Fed Chair are not great ideas," said Kathy Jones, chief fixed income strategist at Schwab. "It is a welcome break from the recent aggressive stance, but until there is actual clarity on what the deals are, the market is likely to remain cautious."

While it's not surprising that Magnificent Seven stocks like Amazon (AMZN) and Tesla benefited from sunnier trade talk that began with remarks from Treasury Secretary Scott Bessent yesterday, don't overlook the industrial and financial sectors, as well as homebuilders. These are cyclical stocks that tend to perform better when the economy improves. Leading names Tuesday included mining company Freeport-McMoRan (FCX), steel makers Alcoa (AA) and Cleveland-Cliffs (CLF), industrial conglomerate 3M (MMM), home builders PulteGroup (PHM) and Toll Brothers (TOLL), and financials like Morgan Stanley (MS), Visa (V), and Mastercard (MA).

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is lower by ~3 basis points to 4.37%.

The U.S. Dollar Index ($DXY) is higher by 0.71 at 99.62.

WTI Crude Oil (/CL) is lower by 2.14% to $62.31/barrel.

Gold prices are slipping somewhat from record high territory and have traded in a range of $3,270.80-$3,396.00, last seen trading lower by 3.34% to $3,305.30/oz.

Natural Gas prices have traded in a range of $2.97-3.07 and were last seen trading higher by 1.83% to $3.06.

Bitcoin (BTC) is higher by ~0.04% to $93,698.00.

Shares of Tesla Inc. (TSLA + $15.73 to $253.70) are trading higher this morning after the electric vehicle maker's CEO Elon Musk said he plans to spend more time with the company and less in Washington, D.C. Some soothing of trade concerns over the past couple days is also likely helping shares. These are overshadowing the company's Q1 earnings-per-share of $0.27 (excluding non-recurring items) that missed that FactSet consensus estimate of $0.41. Revenues that fell 20% year-over-year to $19.3 billion also came in below estimates of $21.2 billion. Puts and calls are trading roughly the same with the April 25th 260.00 call being the highest volume contract (volume is 86,266).

Also trading to the upside this morning is Dow member Boeing Company (BA + $9.41 to $171.93) after the aircraft maker reported a smaller-than-expected Q1 loss of $0.49 per share, compared to $1.18 per share shortfall that FactSet had estimated. BA's revenue of $19.5 billion, came in above the Street's forecast of $19.4 billion, and grew 18% year-over-year. Calls are modestly outnumbering puts, but the September 19th 120.00 put is seeing the highest volume (volume is 13,049).

New 52-week highs (38 new highs today): Beacon Roofing Supply Inc. (BECN + $0.04 to $123.98), Philip Morris International Inc. (PM + $4.88 to $168.99), Skyward Specialty Insurance Group Inc. (SKWD + $0.46 to $55.27)

Some unusual call activity (~14:1 calls over puts) is being seen in Dow member and industrial conglomerate 3M Company (MMM + $0.62 to $136.95) which is primarily being driven by activity on the September 19th 125.00 call with two large blocks (8,250 and 15,000) being bought at the same time for $21.30 and $21.35, respectively, when the bid/ask spread was $20.70 x $21.80. Volume is 23,258 versus open interest is 105 so we can assume we have some large fresh positioning with bullish intent since the trades took place above the midpoint of the bid/ask price.

Bristol-Myers Squibb Company (BMY - $1.92 to $47.90) is trading lower this morning after the pharmaceutical company announced disappointing results from a Phase 3 trial of its treatment for schizophrenia. The announcement resulted in some analyst price target cuts at Citigroup and Deutsche Bank. Puts are slightly outpacing calls, with the June 20th 40.00 put seeing the most activity (volume is 1,685).

Also trading to the downside this morning is Packaging Corporation of America (PKG - $2.86 to $183.56) despite the containerboard and corrugated packaging company reporting Q1 earnings-per-share of $2.31 (excluding non-recurring items), ten cents above the FactSet consensus estimate. The markets appear to be focusing on PKG's Q2 earnings guidance that came in below analysts' expectations. The company cited the continued ambiguity relative to domestic and foreign tariff actions and their effect on global trade and its demand trends. Puts are outnumbering calls ~16:1 with the May 16th 190.00 put seeing the most action from traders (volume is 502).

New 52-week lows (22 new lows today): Creative Realities Inc. (CREX + $0.09 to $1.37), Enphase Energy Inc. (ENPH - $4.03 to $49.40), Windtree Therapeutics Inc. (WINT + $0.03 to $1.12)

Some unusual put activity (~11:1 puts over calls) is being seen in real estate agent and managers company Exp World Holdings Inc. (EXPI + $0.21 to $9.01) which is primarily being driven by activity on the September 19th 10.00 put. We are seeing some medium-sized blocks trading on this contract at various times, driven mainly by a 1,000 contract block that was bought at the ask price of $1.85. Volume is 1,700 compared to open interest of 14, so we know the block trade is a new position with bearish intent since the trade took place at the ask price.

James Hardie Industries PLC ADR (JHX + $0.71 to $23.21): Option volume is running at ~390x the daily average on this building materials company which is primarily being driven by activity on the May 16th 25.00 call. Volume on this contract is 2,510 versus open interest of 46, so we know that the majority of the volume represents fresh positioning. More than half of the activity has been driven by a 1,500 contract block that traded at $0.70 when the bid/ask spread was $0.30 x $0.80. We can assume the intent is bullish in nature since the trade took place above the midpoint of the bid/ask spread.

Payoneer Global Inc. (PAYO + $0.27 to $6.56): Option volume is running at ~40x the daily average on this online payment processing platform which is being driven by activity on the May 16th 6.00 call. Volume on this contract is 3,537 versus open interest of 2 so we can assume we have a large bump in fresh positioning here. The bulk of the activity consisted of various-sized blocks that traded at various times for between $1.10 and $1.20, suggesting bullish intent since they traded at or near their respective ask prices.

Corcept Therapeutics Inc. (CORT + $5.32 to $70.00): Option volume is running at ~19x the daily average on this pharmaceutical company which is being driven by activity on the June 20th 80.00 call. Volume on this contract is 2,174 versus open interest of 42 so we know we have mostly fresh positioning here. The bulk of the activity was driven by various medium-sized blocks that traded at various times, notably an 880 contract block that was acquired for $3.10 when the bid/ask spread was $2.00 x $3.20, suggesting bullish intent since the trade took place above the midpoint of the bid/ask spread.

The Cboe Volatility Index (VIX - 0.62 to 29.95) has been in negative territory all day today (intraday range is 27.11-30.29), as equity markets are rallying around the midday mark (DJI + 489, SPX + 92, COMPX + 430). VIX option volume is below average today as the index is missing from the "Top Volume by Underlying" list. The volume put/call ratio is currently 0.94, with the highest volume contract the May 21st 90.00 call (volume is 40,870 vs. open interest of 65,254).