Today's Options Market Update

The day kicked off with investors still in risk-off mode as they digested results from Alphabet (GOOGL), watched bitcoin crumble, awaited job openings data, and scanned a bearish layoffs report. Major indexes lost ground after an overnight rally effort and volatility soared as Alphabet lost more than 4% on concerns over the company's surprisingly heavy spending plans. Meanwhile, chip stocks got no relief as Qualcomm (QCOM) tumbled following its worse-than-expected guidance. Amazon (AMZN) reports later.

Turning to data, January job cuts from Challenger, Gray, & Christmas surged to the highest level since 2009 at 108,435. There was a "recession-like" spike in job cut announcements for the transportation industry last month, said Kevin Gordon, head of macro research and strategy at the Schwab Center for Financial Research (SCFR). With the government shutdown over, official data resumes after the open with December's Job Openings and Labor Turnover Survey (JOLTS), but nonfarm payrolls won't come out until February 11.

Tech struggles kept haunting major indexes Wednesday, with the Nasdaq down about 3% over the last two sessions. The DJIA climbed yesterday as cyclical stocks—which do better in a strong economy—extended gains, but the broader market stumbled. The rotation trade continues and investors appear to be reallocating away from tech towards AI infrastructure. Heavy machinery firms and transports recently hit all-time highs, which also speaks to the rotation trade, and the manufacturing sector grew last month. Only 19% of S&P 500 constituents outperformed the index over the past year, but that's up to 57% over the last month.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is lower by ~6 basis point to 4.212%.

The U.S. Dollar Index ($DXY) is higher by 0.23 to 97.85.

WTI Crude Oil (/CL) is lower by 3.35% to $62.96/barrel.

Gold prices have traded in a range of $4,805.00-5,045.00 and were last seen trading lower by ~2.33% to $4,835.30/oz.

Natural Gas prices for March futures have traded in a range of $3.371-3.573 today and were last seen trading lower by 2.19% to $3.389.

Bitcoin (BTC) is lower by ~7.67% over the last 24 hours to $67,421.97 today.

Shares of Bristol-Myers Squibb Co. (BMY + $1.01 to $58.63) are moving higher this morning after the drug maker reported Q4 adjusted earnings of $1.26 per share ($0.15 beat) on Q4 revenue of $12.50B (above the $12.28B expected). The company also issued upbeat guidance as full-year 2026 (FY26) adjusted EPS is expected to come in a range of $6.05-6.35 (vs. the $6.02 FactSet estimate), with FY26 revenue expected to come in a range of $46.0-47.5B (above the $44.159B FactSet estimate). Calls are outnumbering puts ~2:1, but the February 13^th 55.00 put is seeing the most action from traders (volume is 7,924).

Also trading to the upside this morning is Intercontinental Exchange Inc. (ICE + $6.30 to $171.15) after the exchange operator reported Q4 adjusted earnings of $1.71 per share ($0.04 beat) on Q4 revenue of $2.504B (above the $2.476B expected). The company also said that it will increase its annual dividend by 8.3% to $2.08 per share. Calls are outnumbering puts ~4:1 with the February 20^th 180.00 call leading the way (volume is 189).

New 52-week highs (173 new highs today): Cardinal Health Inc. (CAH + $17.32 to $224.17), Johson & Johnson (JNJ + $4.55 to $239.02), McDonald’s Corp. (MCD + $1.58 to $325.27)

Some unusual call activity (~100:1 calls over puts) is being seen in Clear Secure Inc. (YOU + $1.44 to $33.22) as option traders primarily target the March 20^th 35.00 call. Volume on this contract is 2,828 versus open interest of 136, so we know that the volume primarily represents new positioning. The majority of the transactions consisted of various-sized blocks that were bought around the same time at the ask price of $1.85 each, which suggests bullish intent.

Shares of Alphabet Inc. (GOOGL - $11.87 to $321.17) are trading lower this morning, even though the parent company of Google delivered strong quarterly results last night after the bell. The company reported Q4 EPS of $2.82 ($0.20 beat) on Q4 revenue that increased 18% YoY to $113.8B (above the $111.43B FactSet consensus estimate). Alphabet’s Cloud revenue increased 48% YoY to $17.66B, which was above the $16.18B analysts had expected. The company’s capital expenditure guidance was significantly hiked to a range of $175-180B, roughly double 2025 levels, and well above the $115.56B expected. Calls are outnumbering puts nearly 2:1 with the February 6^th 330.00 call being the highest volume contract (volume is 23,930).

Also trading to the downside today is Cummins Inc. (CMI - $41.34 to $564.29) after the maker of truck engines and other industrial products reported Q4 net income of $4.27 per share (below the $5.05 FactSet consensus estimate) on Q4 revenue of $8.54B (above the $8.11B expected). Looking ahead, the company said that FY26 revenue is expected to increase 3-8% YoY and FY26 EBITDA to be 17-18% of sales. Calls are outnumbering puts ~2:1 with the February 20^th 580.00 call seeing the most action from traders (volume is 671).

New 52-week lows (246 new lows today): Axon Enterprises Inc. (AXON - $17.02 to $413.63), Flutter Entertainment PLC (FLUT - $2.55 to $151.35), Strategy Inc. (MSTR - $17.02 to $112.07)

Some unusual put activity (~100:1 puts over calls) is being seen in Kodiak Gas Services Inc. (KGS + $2.97 to $45.37) which is primarily driven by a 4,000 contract block that was bought on the July 17^th 40.00 put for $3.18 when the bid/ask spread was $0.75 x $4.20 (open interest is 0). We know that this block is a new position based on the open interest figure, and we can assume that the intent is bearish in nature since the trade took place above the midpoint of the bid/ask spread.

Qiagen NV (QGEN + $0.09 to $24.76): Option volume is running at ~132x the daily average on this maker of diagnostic and life sciences tools which is primarily being driven by a couple of large blocks that simultaneously traded on the May 15^th expiration earlier this morning:

• 55.00 call (open interest is 6): A 20,000 contract block was bought for $3.25 when the bid/ask spread was $1.45 x $4.60.
• 65.00 call (open interest is 17): A 20,000 contract block was sold for $0.65 when the bid/ask spread was $0.00 x $2.45.

We know that these blocks are new positions based on the respective open interest figures, and it appears that a $10.00-wide call front spread was established for a net debit of $2.60 (x 20K contracts x 100 multiplier, excluding commissions). The positioning suggests that the block trader believes that QGEN will close above the break-even price of $57.60 at expiration.

WPP PLC (WPP - $0.03 to $17.70): Option volume is running at ~23x the daily average on this media company as option traders primarily target the August 21^st 17.50 call. Volume on this contract is 2,037 versus open interest of 0, so we know that all the volume represents new positioning (assuming no day trades). The majority of the transactions consisted of various-sized blocks that were bought at various times for between $2.40-2.55 each, which suggests bullish intent.

Steven Madden Ltd. (SHOO - $3.20 to $35.57): Option volume is running at over 16x the daily average on this footwear and apparel maker as option traders primarily target the February 20^th 30.00 put. Volume on this contract is 4,873 versus open interest of 229, so we know that the volume primarily represents new positioning. The majority of the transactions consisted of various-sized blocks that were bought at various times at the ask prices of $0.25 & $0.30 each, which suggests bearish intent.

The Cboe Volatility Index (VIX + 1.46 to 20.10) has been in positive territory all day today (the intraday range is 19.06-23.10), as equity markets are lower across the board around the midday mark (DJI - 311, SPX - 47, $COMP - 175). VIX option volume is above average today at 716,871 contracts, and calls are outnumbering puts roughly 4:3 so far today.