Today's Options Market Update

Stock futures reversed course this morning following a surprise drop of 32,000 jobs in November's report from ADP and a report that Microsoft had lowered its AI Software sales quotas. Analysts had expected growth of 10,000, with the private-sector ADP report attracting more focus than usual in the absence of official government data due to the shutdown. Losses were most prevalent at smaller businesses, ADP said.

"This morning's ADP report confirms that the labor market is cooling, but we still weigh the ADP release a bit less than the standard nonfarm payrolls report and unemployment rate from the Bureau of Labor Statistics," said Collin Martin, head of fixed income research and strategy, Schwab Center for Financial Research (SCFR). "The Fed was expected to cut rates next week regardless, but this further supports the case, even if it's just an 'insurance cut' meant to limit a further deterioration of the labor market." Futures trading now bakes in an almost 90% chance of a rate cut, according to the CME FedWatch Tool. Official November jobs data are due December 16.

The Microsoft news, first reported by the Information, may signal the company is adjusting its targets to compensate for resistance from its customers' willingness to pay more for AI. Per the report, corporate customers have complained over the past year that it's hard to measure the savings from using the technology.

Tuesday featured light gains led by tech and crypto as risk sentiment improved in low-volume trading. Still, the S&P 500^® index remains below last week's close—and more names declined than advanced, raising questions about bullish conviction so close to all-time highs. Salesforce (CRM) and Snowflake (SNOW) wait in the wings after today's close following Marvell Technology (MRVL) and CrowdStrike's (CRWD) results late yesterday. Also, today offers investors a close-up look at holiday shopping trends as Macy's (M) reported.

Make sure to check out our upcoming Schwab Market Outlook where you can get expert insights on market drivers and their potential impact on your portfolio.  Please see the summary and link below.

Join us for this Schwab Coaching special event: the 2026 Market Outlook on December 11 at 7:00 p.m. ET. Just tune in to our media affiliate Schwab Network™ to see what our experts think might affect the markets next year.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is lower by 1 bps 4.07%.

The U.S. Dollar Index ($DXY) is down by 0.45% at 98.90.

The CBOE Volatility Index^® (VIX) is down 2.71% to 16.13.

WTI Crude Oil (/CL) is higher by 1.14% to $59.30/barrel.

Bitcoin (BTC) is rebounding by 1.57% to $92,895.

Ethereum (ETH) is up by 4.16% today to $3,116.

Shares of Marvell Technology Inc. (MRVL + $4.82 to $97.61) are up over 5.00% in morning trading, after the company beat third-quarter earnings estimates. Marvell reported quarterly adjusted EPS of $0.76, topping the analyst consensus estimate of $0.73. Quarterly revenue came in at $2.08 billion, which beat the Street estimate of $2.07 billion and was up from revenue of $1.52 billion from the same period last year. Marvell also provided a forecast that its custom chip sales will increase 20% and forecast revenue of roughly $2.2 billion in the fiscal fourth quarter, pushing its EPS to $0.79. Chief Executive Officer Matt Murphy indicated that Marvell revenue could reach $10 billion in the next fiscal year, per Bloomberg.

In addition to the earnings report, Marvell announced its intention to acquire startup Celestial AI for at least $3.25 billion, a move it said would bolster the artificial intelligence push. Celestial AI, a Santa Clara, California-based startup founded in 2020, offers a technology called photonic fabric that connects components within AI infrastructure. It relies on light to more efficiently move data, helping artificial intelligence systems run more quickly, per Bloomberg.

Analysts were mostly upbeat following the news, with JP Morgan and Keybanc both raising their price targets on the stock to $130.

Option trading in MRVL currently stands at 205,906 contracts, 8x the average daily volume with calls outpacing puts nearly 2:1. Leading the way are the following trades, expirations, and strikes:

• December 5th, 2025, 105.00 call accounted for 13,219 contracts; open interest is 11,709 contracts.
• December 5th, 2025, 95.00 call accounted for 8,511 contracts; open interest is 9,468 contracts.
• December 5th, 2025, 100.00 call accounted for 8,221 contracts; open interest is 6,633 contracts.

New 52-week highs (195 new highs today): Vale S.A. (VALE + $0.40 to $13.29), Capricor Therapeutics (CAPR + $19.10 to $25.46), American Eagle Outfitters (AEO + $2.99 to $23.82), Apple Inc. (AAPL + $0.10 to $286.29)

Unusual call activity is noted today in Box Inc. (BOX + $1.87 to $32.04), as call volume currently stands at 12,013 contracts, 16x the average daily volume and 4x the put volume. Activity is greatest in the December 19th, 2025, expiration month, due to several large block orders that have totaled over 7,000 contracts, specifically at the 32.00 and 33.00 strike calls. Volume has skewed to the buy side, with many of the transactions occurring at the offer price. The open interest at these strikes was a collective 1,649 contracts, so we know this represents new positioning (suggesting bullish intent). Box reported earnings last night that were slightly below estimates but raised their fiscal year 2026 and 2027 revenue guidance.

Another name exhibiting unusual activity today is iRobot Corp. (IRBT + $1.10 to $3.05), as call volume has spiked to 63,320 contracts in morning trading, 22x the average volume. Two-thirds of the volume can be attributed to the December 19th, 2025, expiration where the 2.00, 3.00, and 4.00 strikes have seen multiple block orders trade. While the action has been two-ways, the majority has been on the buy side, pushing near-term implied volatility into the 97th percentile. This comes as traders weigh the significance of a Politico report that stated the Trump administration is considering issuing an executive order on robotics technology next year. This has pushed shares of IRBT higher by over 55% today. The December 3.00 strike call has seen most of the volume, as contracts have exceeded 27,900. With an open interest of 5,703, we know this primarily represents new positioning (suggesting bullish intent).

Shares of Pure Storage Inc. (PSTG - $23.94 to $70.77) are cratering 25% today, their largest intraday drop on record, after the computer hardware and storage company reported third-quarter earnings that met analysts' estimates, with revenue totaling $964.5 million. The company posted adjusted EPS of $0.58 for the quarter, in line with analysts' estimates. Revenue was up 16% from the prior year, exceeding estimates for $955.9 million. Even more perplexing, Pure Storage upped its fiscal-year outlook for adjusted operating income to $634 million at the midpoint, up from $615 million. So why are the shares down so much? Bloomberg reported that Pure Storage announced plans to reinvest some of its revenue from sales to AI hyperscalers into research and development, and sales and marketing. These investments could weigh on profit margins in fiscal 2027. Also, the company's revenue beat was narrower than its outperformance in the second quarter when the shares responded with a 31% jump.

Today's move took the share price back near the August 28th initial opening price of $69.72 which coincided with the second quarter earnings release. Holding that level would be an important technical step to maintain the bull narrative.

Option trading in PSTG currently stands at 33,620 contracts in morning trading, on pace for 11x the daily average, with calls and puts basically even. Leading the way are the following trades, expirations, and strikes:

• December 19th, 2025, 80.00 call accounted for 2,660 contracts; open interest is 334 contracts.
• December 19th, 2025, 75.00 call accounted for 2,055 contracts; open interest is 73 contracts.
• December 19th, 2025, 85.00 put accounted for 1,646 contracts; open interest is 2,031 contracts.

New 52-week lows (36 new lows today): Gitlab Inc. (GTLB - $6.13 to $37.24), Acadia Healthcare Company (ACHC - $2.40 to $14.09), Li Auto Inc. (LI - $0.69 to $17.41), Jasper Therapeutics Inc. (JSPR - $0.11 to $1.47)

There is unusual put activity today in GXO Logistics Inc. (GXO + $1.74 to $52.71). This activity equates to over 6,420 put contracts, 220x average daily put volume and 9x today's call volume. Most of the volume can be attributed to the December 19th, 2025, expiration, specifically at the 52.50 strike put, where traders have sold 6,136 contracts in a single block trade. The sale price of $1.85 was at the bid when the bid/ask was $1.85 x $2.70. With only 12 contracts of open interest, we know this represents new positioning (suggesting neutral to bullish intent). Shares of GXO are up over 14% since bottoming out at the 200-day SMA price of $46.00 on November 21st.

Unusual activity has also been detected in Dollar General Corp. (DG + $1.12 to $111.15), as put volume stands at 14,398 contracts in morning trading, 7x average daily volume and 4x the call volume. Over a third of that volume stems from a 2,800-contract put vertical spread was purchased in the January 16th, 2026, expiration month. Traders bought the 110.00/100.00 strike put vertical for a price of $4.00, slightly above the mid-point, when the bid/ask was $2.40 x $6.17. There is a collective open interest of over 5,000 contracts between the two strikes, so this trade could represent closing a prior short position. Shares of DG have rallied over 16% since November 7th.

The Cboe Volatility Index (VIX - 0.46 to 16.13) is down this morning by 2.71%, as equity markets are higher across the board (DJI + 335, SPX + 19, COMPX + 29). VIX movement has occurred within a normal range today (the intraday range is 16.10 – 17.28). The highest volume contract is currently the January 21st, 2026, 17.00 put (volume is 45,710 vs. open interest of 194,464).