Today's Options Market Update

Wall Street took an early breather from its rapid, record-breaking mid-week rally. Major indexes flattened and crude slipped more than 5% as the U.S. awaited a response from Iran to its latest proposal ahead of possible talks. In a data appetizer to Friday's main course of nonfarm payrolls, April job cuts climbed sharply, but that apparently didn't stop people from having a bite at McDonald's (MCD), which reported strong quarterly results.

Though the conflict remains central, focus shifts Friday to April nonfarm payrolls, due at 8:30 a.m. ET. The average analyst estimate for new jobs has slipped over the course of the week and the unemployment rate is expected to stay at 4.3%. "The labor market has been showing some signs of stabilization, so Friday's report will be closely watched to see if last month's strong report was a one off or the start of a trend," said Cooper Howard, director of fixed income research and strategy at the Schwab Center for Financial Research (SCFR).

On Wednesday, major indexes posted their second straight day of record highs for the S&P 500 Index, the Nasdaq Composite, and the Russell 2000^®. The Dow Jones Industrial Average clawed back above 50,000 briefly late in the session. Volatility slid and the dollar fell almost 0.5%, another sign of easing war fears. Strong earnings from chip giant Advanced Micro Devices (AMD) helped lead the way, sending semiconductor stocks up another 4%. In data today, weekly initial jobless claims stayed low at 200,000 while preliminary first quarter productivity of 0.8% fell from 1.6% in the fourth quarter. Unit labor costs rose less than expected at 2.3%. Treasury yields fell on the data and cheaper oil.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is slightly higher to 4.362%.

The U.S. Dollar Index ($DXY) is lower by 0.133 to 97.89.

WTI Crude Oil (/CL) is lower by 2.91% to $92.31/barrel.

Gold prices have traded in a range of $4,694.00-4,775.20 and were last seen trading lower by ~1.13% to $4,747.50/oz.

Natural Gas prices for May futures have traded in a range of $2.676-2.801 today and were last seen trading higher by 2.16% to $2.789.

Bitcoin (BTC) is lower by ~1.83% over the last 24 hours to $79,944.33 today.

Shares of Howmet Aerospace Inc. (HWM + $18.87 to $275.30) are gapping up to all-time highs this morning after the provider of advanced engineering solutions to the aerospace and transportation industries reported Q1 adjusted earnings of $1.22 per share ($0.11 beat) on Q1 revenue that increased ~19.10% year-over-year (YoY) to $2.313B (above the $2.241B consensus estimate). The company also provided upbeat guidance as Q2 adjusted EPS is expected to come in a range of $1.22-1.24 and Q2 sales are expected to come in a range of $2.39-2.41B, above the respective $1.15 & $2.338B consensus estimates. Puts are outnumbering calls ~2:1 with the May 15^th 210.00 put leading the way (volume is 4,583).

Also trading to the upside this morning is SiTime Corp. (SITM + $156.67 to $780.00) after the maker of silicon timing systems reported Q1 adjusted EPS of $1.44 ($0.28 beat) on Q1 revenue that increased 88.29% YoY to $113.567M (above the $103.388M expected). Looking ahead, the company said that Q2 adjusted EPS is expected to come in a range of $1.85-2.00 on Q2 revenue that is expected to come in a range of $140-150M, both of which are well above the respective $1.17 & $111.912M consensus estimates. Calls are outnumbering puts ~3:2 with the May 15^th 600.00 call being the highest volume contract (volume is 44).

New 52-week highs (173 new highs today): Apple Inc. (AAPL + $2.27 to $289.78), Fortinet Inc. (FTNT + $21.37 to $111.32), MaxLinear Inc. (MXL + $6.40 to $87.63)

Some unusual call activity (~27:1 calls over puts) is being seen in data security solutions provider Rubrik Inc. (RBRK + $3.44 to $61.22) which is primarily being driven by an 18,250 contract block that was bought on the June 5^th 75.00 call for $1.70 when the bid/ask spread was $1.35 x $2.00 (open interest is zero). 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. This appears to be a bullish "earnings play" as RBRK is scheduled to report Q1 earnings on June 4^th after the close, one day before the expiration of these calls.

Shares of Arm Holdings PLC (ARM - $22.54 to $214.76) are under pressure this morning despite posting better-than-expected quarterly results and guidance last night after the bell. The chip architecture design firm reported fiscal Q4 adjusted earnings $0.60 per share ($0.02 beat) on Q1 revenue that increased 20% YoY to $1.49B (above the $1.471B expected). Looking ahead, ARM guided Q1 EPS to a range of $0.36-0.44 (vs. the $0.36 estimate) and Q1 sales to a range of $1.255-1.265B (above the $1.25B expected). Shares of ARM were up roughly 60% over the past month heading into last night's report, so perhaps some profit taking is in play today. Calls are outnumbering puts roughly 2:1 with the May 8^th 270.00 call leading the way (volume is 9,559).

Also trading to the downside this morning is Cheniere Energy Inc. (LNG - $14.72 to $246.70) after the provider of liquified natural gas (LNG) and energy infrastructure services reported a GAAP EPS loss for the quarter, although earnings beat estimates on an adjusted basis and guidance was revised higher. LNG reported a Q1 GAAP loss of $16.65 per share ($4.78 on an adjusted basis), versus the $4.19 expected, Q1 revenue that increased 7.79% YoY to $5.868B (above the $5.759B consensus estimate). The company also raised its FY26 consolidated adjusted EBITDA to a range of $7.25-7.75 per share (from $6.75-7.25 per share) and its FY26 distributed cash flow to a range of $4.75-5,.25 per share (from $4.35-4.85 per share). Calls are outnumbering puts ~3:2 with the May 8^th 250.00 call being the highest volume contract (volume is 361).

New 52-week lows (77 new lows today): Cable One Inc. (CABO + $4.49 to $60.21), Epam Systems Inc. (EPAM - $7.14 to $99.83), Planet Fitness Inc. (PLNT - $20.78 to $43.18)

Some unusual put activity (~52:1 puts over calls) is being seen in Public Service Enterprise Group Inc. (PEG - $0.95 to $78.40) as option traders primarily target the August 21^st 70.00 put. Volume on this contract is 3,090 versus open interest of 12, so it’s likely that nearly all the volume represents fresh positioning. The bulk of the transactions consisted of various-sized blocks that were bought at various times for between $1.25-1.35 each, which suggests bearish intent.

Boot Barn Holdings Inc. (BOOT - $8.55 to $163.35): Option volume is running at ~80x the daily average on this specialty retailer which is primarily being driven by a couple of large blocks that simultaneously traded on the May 15^th expiration earlier this morning:

• 180.00 call (open interest is 93): A 2,000 contract block was sold for $2.98 when the bid/ask spread was $2.30 x $3.90.
• 165.00 call (open interest is 211): A 1,000 contract block was bought for $8.61 when the bid/ask spread was $7.70 x $9.20.

We know that both these blocks are new positions based on the respective open interest figures, and it appears that a call front spread was established for a net debit of $2.65 (x 1K contracts x 100 multiplier, excluding commissions). The positioning suggests that the block trader believes that BOOT can potentially move up towards the maximum gain price of exactly $180.00 by the expiration date. BOOT is scheduled to report fiscal Q4 earnings on May 13^th after the bell, so this positioning captures the potential impact of that event

Laser Photonics Corp. (LASR - $2.77 to $68.51): Option volume is running at ~32x the daily average on this maker of photonics-based products and solutions as option traders primarily target the June 18^th 80.00 call. Volume on this contract is 11,625 versus open interest of 661, so it’s likely that nearly all the volume represents fresh positioning. The bulk of the transactions consisted of various-sized blocks that were bought at various times for between $7.00-8.60 each, which suggests bullish intent.

MakeMyTrip Ltd. (MMYT + $1.01 to $50.50): Option volume is running at ~17x the daily average on this online travel service provider of which is primarily being driven by a couple of large blocks that simultaneously traded on the June 18^th expiration earlier this morning:

• 55.00 call (open interest is 114): A 2,000 contract block was bought at the ask price of $2.90.
• 65.00 call (open interest is 3): A 2,000 contract block was sold for $0.10 when the bid/ask spread was $0.00 x $1.15.

We know that both these blocks are new positions based on the respective open interest figures, and it appears that a $10.00-wide bull call spread was established for a net debit of $2.80 (x 1K contracts x 100 multiplier, excluding commissions). The positioning suggests that the block trader believes that MMYT will close above the break-even price of $57.80 at expiration. MMYT is scheduled to report fiscal Q4 earnings on May 19^th before the bell, so this positioning captures the potential impact of that event

The Cboe Volatility Index (VIX – 0.05 to 17.34) has been in positive territory all day today (the intraday range is 17.08-17.60), as equity markets are mostly lower around the midday mark (DJI - 202, SPX - 13, $COMP + 11). VIX option volume is below average today at 294,287 contracts, and calls are outpacing puts roughly 10:1 so far today.