Today's Options Market Update

(Note to readers: U.S. markets are closed Monday, February 16, in observance of the U.S. President's Day holiday. The Schwab Market Update will return on Tuesday, February 17.)

Major indexes pared losses early today and briefly turned green after January's Consumer Price Index (CPI) came in slightly milder than expected. Headline CPI rose 0.2%, below the 0.3% average estimate, while core CPI—which excludes food and energy—rose 0.3%, in line with consensus. Headline CPI rose 2.4% year over year, the lowest since May and slightly below the expected 2.5%.

"This should be well received by those on the Fed worried about sticky inflation," said Collin Martin, head of fixed income research and strategy at the Schwab Center for Financial Research, or SCFR. "This shouldn't change the near-term path of Fed policy, with the Fed likely to stay on hold for a few more meetings, but more releases like this might get more officials on board for cuts later this year."

Beyond CPI, data and earnings today are sparse and trading may thin ahead of the three-day holiday weekend. The question is whether participants cover any short positions after Thursday's sell-off or rediscover their passion to "buy the dip" that proliferated earlier this year. Worries persist that AI substitution could hurt many white-collar businesses. It began about a month ago when underperformance in software stocks shifted into higher gear, then spread beyond software this week. A "sell first, then assess later" theme has developed, said Liz Ann Sonders, chief investment strategist at SCFR, and the S&P 500 Index is on pace for its second straight losing week. The tech-heavy Nasdaq-100® (NDX) is likely headed for its third, with next week bringing a first official estimate of fourth quarter gross domestic product (GDP) growth and minutes from the Federal Reserve's last meeting.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is down 4 bps to 4.06%.

The U.S. Dollar Index ($DXY) is lower by 0.07% to 96.86.

The CBOE Volatility Index^® (VIX) is down 6.63% to 19.45.

WTI Crude Oil (/CL) is higher by 0.10% to $62.90/barrel.

Bitcoin (BTC) is up by 5.65% to $69,230.

Ethereum (ETH) is up by 7.69% to $2,065.

Shares of Rivian Automotive Inc. (RIVN + $2.91 to $16.91) are up over 20.00% today after the electric vehicle company reported better-than-expected Q4 results and issued a 2026 delivery outlook range with a midpoint above analyst estimates. Rivian reported an adjusted EPS loss of $0.54, better than the Wall Street estimates. Revenue of $1.29 billion just topped Wall Street's prediction. Gross profit was $120 million in Q4, helping the company post a positive full-year result.

Going forward, Rivian is forecasting a 2026 adjusted loss before interest, taxes, depreciation and amortization of $1.8 billion to $2.1 billion, per Bloomberg. The midpoint of that range slightly exceeds the roughly $1.8 billion loss expected by analysts. Rivian also announced it expects deliveries of its long-awaited R2 midsized SUV in the Q2 of 2026. Rivian expects to deliver between 62,000 and 67,000 vehicles this year.

Option trading in RIVN currently stands at 223,791 contracts, 8x the average daily volume with calls outpacing puts 2:1. Leading the way are the following trades, expirations, and strikes:

• February 13th, 2026, 18.00 call accounted for 19,595 contracts; open interest is 4,231 contracts.
• February 20th, 2026, 20.00 call accounted for 9,448 contracts; open interest is 63,914 contracts.
• February 13th, 2026, 16.50 put accounted for 6,999 contracts; open interest is 1,006 contracts.

New 52-week highs (489 new highs today): Transocean Inc. (RIG + $0.43 to $5.88), Verizon Communication Inc. (VZ + $1.52 to $48.91), Pfizer Inc. (PFE + $0.25 to $27.86), Vertiv Holdings Corp. (VRT + $40.21 to $239.86)

Unusual call activity is noted today in Dauch Corp. (DCH - $1.47 to $6.96), as call volume currently stands at 80,684 contracts, 100x the average daily volume and 20x the put volume. Most of the activity can be attributed to large call vertical spread that was bought in the July 17th, 2026, expiration month. Traders paid $0.39 for 18,500 of the 8.00/10.00 call verticals in a single block trade and have purchased over 28,000 of the vertical spreads in morning trading. With a collective open interest of around 19,900 contracts total, we can assume this represents a combination of new and continued positioning at the strikes (suggesting bullish intent). Shares of DCH are down over 17% today after the company reported Q4 net sales that came roughly in line with the average analyst estimate.

Another name exhibiting unusual call activity today is SK Telecom Co. (SKM + $1.39 to $32.17), as call volume has risen to 10,819 contracts in morning trading, 19x the average volume and 30x the put volume. Traders are most active in the March 20th, 2026, expiration, particularly at the 40.00 strike call where over 5,670 contracts have traded through multiple block trades. Most of these trades were buys with prices ranging from $0.60 to $1.20 each, at or near the offer price. There were only 328 contracts of open interest, so we know this represents new positioning (suggesting bullish intent). Shares of SKM hit a 52-week high of $33.45 earlier this morning and have rallied over 60% since posting a 52-week low price of $19.66 just six weeks ago.

Shares of Pinterest Inc. (PINS - $3.55 to $14.99) are plunging over 19.00% today, to a new 52-week low, after the company reported slightly lower-than-expected holiday quarter sales and missed analyst earnings estimates. Revenue for the last quarter was $1.32 billion, just below the analyst estimate for $1.33 billion, and adjusted EPS came in at $0.67, also below estimates for $0.69. The company also projected current-quarter earnings and sales that fell short of Wall Street estimates. Pinterest now forecasts Q1 adjusted EBITDA of $166 million to $186 million and revenues of $951 to $971 million, both below analyst targets. Pinterest also announced a round of layoffs took place in late January, citing a shift in priorities to focus more extensively on AI products.

Many analysts have lowered their price targets, following the report, including Goldman Sachs (to $23 from $32), Piper Sandler (to $21 from $33), and Wedbush (to $16 from $30).

Option trading in PINS currently stands at 110,485 contracts, 7x the average daily volume with puts outpacing calls 1.5:1. Leading the way are the following trades, expirations, and strikes:

• February 20th, 2026, 13.00 put accounted for 16,212 contracts; open interest is 279 contracts.
• February 13th, 2026, 13.00 put accounted for 6,658 contracts; open interest is 987 contracts.
• February 13th, 2026, 17.00 put accounted for 5,794 contracts; open interest is 5,917 contracts.

New 52-week lows (182 new lows today): AMC Entertainment (AMC - $0.04 to $1.28), Zillow Group (Z - $7.95 to $46.76), Snap Inc. (SNAP - $0.23 to $5.00), Avantor Inc. (AVTR - $1.89 to $9.28)

There is unusual put activity today in Aramark Inc. (ARMK - $0.03 to $39.13). This activity equates to over 5,016 put contracts, 170x average daily put volume and 500x call volume. Two large block trades in the March 20th, 2026, expiration accounted for nearly all the volume. Traders bought 2,500 each of the March 37.00 strike and 35.00 strike puts in a single transaction, paying $1.15 for the combination. This type of trade is known as a "put stupid," you can't make this stuff up, where two put strikes in the same month are bought in a single order. There was a total of one contract of open interest between the two strikes, so we know this represents new positioning (suggesting bearish intent). So, why would traders employ this strategy? Shares of ARMK rallied from $38.05 to $42.94, going into and coming out of earnings which were announced February 9th. The corresponding price move back to its current level of $39.13 suggests the move was not sustained, so traders may be hedging for further downside.

Unusual activity has also been detected in Upstart Holdings Inc. (UPST + $1.09 to $31.28), as put volume stands at 84,109 contracts, 8x average volume and 5x call volume, in morning trading. Nearly all of the volume can be attributed to a large ratio put butterfly that traded in the February 20th, 2026, expiration month. This trade was basically a rolling down of long put strikes, as traders sold their long 35.00 strike positions 19,110 times to buy the 30.00 strike 38,220 times, incorporating a sale of the 28.00 strike puts in the transaction. This equated to a large ratio put butterfly that keeps the traders in a bearish position, long the 30.00 strike puts and trims their short delta exposure, as they closed puts that were deep-in-the-money. Shares of UPST just hit a 52-week low price of $29.61 earlier this morning, and it appears traders believe this move could continue.

The Cboe Volatility Index (VIX – 1.37 to 19.45) is down by 6.63%, as equity markets are higher in late morning trading (DJI + 207, SPX + 41, COMPX + 121). VIX movement has occurred within a wider range today (the intraday range is 19.23 to 22.40). The highest volume contract is currently March 18th, 2026, 30.00 call (volume is 55,905 vs. open interest of 101,207).