Today's Options Market Update

The old week ended with fading tariff and government shutdown fears. Monday opened with both back in the headlines after President Trump threatened 100% tariffs on Canada and Democrats announced opposition to Department of Homeland Security (DHS) funding— a move that could trigger a partial government shutdown Friday. Volatility and metals prices climbed early today, the dollar fell, and U.S. stock indexes treaded water.

Even without those weekend events, this would be among the busiest periods of the quarter, featuring a Federal Reserve meeting, several Treasury auctions, and earnings from mega caps over coming days. A 2-year Treasury note auction with results due later today followed by a 5-year auction tomorrow could reveal how eager investors are to buy U.S. debt following last Tuesday's "sell America" plunge in markets and today's drop in the dollar. "I think it's an exaggeration to say this is a 'sell U.S.' kind of market in the long run," said Kathy Jones, chief fixed income strategist at the Schwab Center for Financial Research, or SCFR. "It's just really hard to replace U.S. Treasuries and U.S. dollars in a global financial system. But people are going into things like gold as an alternative."

On Friday, major indexes finished mixed amid softness in banks but strength in several Magnificent Seven names, including Nvidia (NVDA). The S&P 500 index ended down for the second straight week. This week features earnings from about 90 S&P 500 companies including Boeing (BA), Caterpillar (CAT), Starbucks (SBUX), and General Motors (GM). By the end of last week, 13% of S&P 500 companies had reported with 75% beating analysts' estimates for earnings per share and 69% surpassing revenue expectations, according to FactSet.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is lower by ~3 basis point to 4.205%.

The U.S. Dollar Index ($DXY) is lower by 0.62 to 96.98.

WTI Crude Oil (/CL) is lower by 0.57% to $60.72/barrel.

Gold prices have traded in a range of $5,002-5107.90 and were last seen trading higher by ~2.16% to $5,087.30/oz.

Natural Gas prices have traded in a range of $5.728-6.411 today and were last seen trading higher by 21.54% to a four-year high of $6.41.

Bitcoin (BTC) is lower by ~1.96% to $88,272.90 today.

Shares of Meta Platforms Inc. (META + $8.72 to $667.38) are moving higher this morning after Rothschild & Co. upgraded the social media giant to “Buy” from “Neutral” and increased their price target on the stock to $900.00 from $740.00. Rothschild & Co. analyst James Cordwell acknowledged that the stock could trade lower if CapEx guidance continues to rise but believes 2026 guidance is “set to leave estimates factoring in all the cost and little upside from AI, now seems opportune for investors to start building positions”. META reports Q4 earnings on Wednesday after the bell. Calls are outnumbering puts better than 2:1 with the January 30^th 700.00 call seeing the most action from traders (volume is 8,833).

Also trading to the upside this morning is Cisco Systems Inc. (CSCO + $1.88 to $76.47) after Evercore ISI upgraded the networking company to “Outperform” from “In Line” and hiked their price target on the stock to $100.00 from $80.00. Analysts at Evercore ISI said the company is benefitting from numerous demand trends that will continue to boost sales and earnings in the future. Calls are outnumbering puts better than 2:1 with the January 30^th 78.00 call leading the way (volume is 2,288).

New 52-week highs (189 new highs today): Agnico-Eagle Mines Ltd. (AEM + $5.13 to $219.67), Baker Hughes Company (BKR + $1.95 to $55.87), Freeport McMoRan Inc. (FCX + $2.21 to $62.62)
 

Some unusual call activity (~22:1 calls over puts) is being seen in cloud-computing and edge-infrastructure company Fastly Inc. (FSLY + $0.61 to $9.90) as option traders primarily target the January 30^th 10.00 call. Volume on this contract is 3,700 versus open interest of 706, so we know that the volume primarily represents fresh positioning. The bulk of the transactions consisted of various large to-sized blocks that were bought at various times for between $0.28-0.32 each, which suggests bullish intent.

Shares of Public Storage Inc. (PSA - $1.54 to $281.09) are trading lower this morning after Wolfe Research downgraded the specialized real estate investment trust (REIT) to “Peer Perform” from “Outperform” without a price target. Wolfe Research analyst Andrew Rosivach said the company has the potential for meaningful earnings growth in 2027 but near-term the stock could pause until those growth catalysts become more apparent. Option volume is light at the time of this writing with the February 20^th 270.00 put being the highest volume contract (volume is 13).

Also trading to the downside today is Booz Allen Hamilton Inc. (BAH - $6.93 to $95.30) following news that the U.S. Treasury Department is canceling all contracts with the IT services provider due to failure to protect sensitive data. The Treasury Department currently has 31 separate contracts totaling $4,8M in annual spending and $21M in total obligations. Puts are outpacing calls ~5:1 with the February 20^th 90.00 put seeing the most action from traders (volume is 1,457).

New 52-week lows (41 new lows today): Flutter Entertainment PLC (FLUT + $0.39 to $175.30), Net Lease Office Properties (NLOP - $0.22 to $18.62), Paycom Software Inc. (PAYC - $6.58 to $145.71)

Some unusual put activity (~40:1 puts over calls) is being seen in Papa John’s International Inc. (PZZA - $0.14 to $36.76) which is primarily driven by a couple of large blocks that were bought around the same time on the March 20^th 30.00 put – a 4,800 contract block was bought for $0.40 and a 3,200 contract block was bought for $0.45 when the bid/ask spread was $0.05 x $0.70 (open interest is 8). We know that these blocks are new positions based on the open interest figure, and we can assume that the intent is bearish in nature since both trades took place above the midpoint of the bid/ask spread.

Immunovant Inc. (IMVT + $1.18 to $27.19): Option volume is running at ~24x the daily average on this biotech company which is primarily driven by a 2,000 contract block that was bought on the April 17^th 30.00 call at the ask price of $2.50 (open interest is 403). 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 at the ask price.

Royal Caribbean Group Inc. (RCL + $5.34 to $291.45): Option volume is running at ~7x the daily average on this cruise line operator which is primarily driven by a 4,000 contract block that was bought on the March 20^th 310.00 call at the ask price of $13.35 (open interest is 1,225). 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 at the ask price.

BHP Group Ltd. (BHP + $1.01 to $68.53): Option volume is running at ~7x the daily average on this metals & mining company which is primarily driven by a couple of large blocks that were bought on the January 2027 80.00 call – a 4,340 contract block was bought at the ask price of $4.40 and (at a different time) a 4,220 contract block was bought at the ask price of $4.30 (open interest is 920). We know that these blocks are new positions based on the open interest figure, and we can assume that the intent is bullish in nature since both trades took place at the ask price.

The Cboe Volatility Index (VIX – 0.09 to 16.00) has been on both sides of the unchanged line today (the intraday range is 15.97-17.39), as equity markets are higher across the board around the midday mark (DJI + 160, SPX + 38, $COMP + 160). VIX option volume is average today at 320,788 contracts, and calls are outnumbering put better than 2:1 s so far today.