Today's Options Market Update

Investors might feel like they're drowning in data and earnings and today won't throw them a life jacket. Instead, it began with the September Personal Consumption Expenditures (PCE) price index that came in just as Wall Street expected at 3.6% on an annual basis and 3.1% for core excluding food and energy.

"This is still elevated and too high for the Fed's liking," said Cooper Howard, director of fixed income research and strategy at the Schwab Center for Financial Research (SCFR). "For the Fed, I think it means that December is very much in play. The economy is strong, the labor market is resilient, and inflation is high, which all point to the Fed needing to tighten further."

The Federal Reserve's 10-2 vote to pause rates yesterday drew little market reaction as stocks finished mostly higher, led by tech. Fed Chairman Kevin Warsh declined to hint where rates are headed but noted it's an "information rich" environment—meaning data and other events could shape the next move. Tech crumbled early today after a dramatic miss from Alphabet (GOOGL), where heavy capital expenditures took a large bite out of free cash flow. Microsoft's (MSFT) results impressed and Amazon (AMZN) reports later.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is lower by ~6 basis points to 4.982%.

The U.S. Dollar Index ($DXY) is lower by 0.21 at 101.99.

WTI Crude Oil (/CL) December futures are lower by 2.62% to $100.09/barrel.

Gold prices have traded in a range of $4,027.00-4,081.70 and were last seen trading lower by ~0.36% to $4,036.90/oz.

Natural Gas prices for September futures have traded in a range of $2.897-3.073 today and were last seen trading lower by 3.17% to $2.936.

Bitcoin (BTC) is higher by ~0.22% over the last 24 hours to $81,451.34 today.

Shares of Royal Caribbean Cruises Inc. (RCL + $12.55 to $310.85) are trading higher this morning after Freedom Broker upgraded the cruise liner to “Buy” from “Hold” and bumped their price target on the stock to $379.00 from $351.00. Analysts at Freedom Broker made the move following RCL’s quarterly results and raised their adjusted EBITDA forecasts for 2027 to $8.6B (from $8.4B) and 2028 to $9.6B (from $9.3B). Shares of RCL are trading at a 10-week high this morning. Calls are outnumbering puts ~2:1 with the November 20^th 300.00 call being the highest volume contract (volume is 101).

Also trading to the upside this morning is eBay Inc. (EBAY + $5.99 to $124.01) after the global online marketplace reported Q3 adjusted EPS of $1.51 ($0.10 beat) on Q3 revenue that increased 13.69% year-over-year (YoY) to $3.206B (above the $3.114B expected). The company also provided upbeat guidance as full-year 2026 (FY26) adjusted EPS is expected to come in a range of $6.25-6.30 (above the $6.16 consensus estimate) and FY26 revenue is expected to come in a range of $12.62-12.67B (vs. the $12.55B expected). $7.28 (from $7.22) and FY26 sales guidance to $92.60B (from $91.20B). Multiple analysts increased their price target on the stock following the results. Calls are outnumbering puts ~3:2 with the October 30^th 117.00 call being the highest volume contract (volume is 1,921).

New 52-week highs (111 new highs today): Amgen Inc. (AMGN + $9.80 to $461.63), Crocs Inc. (CROX + $30.77 to $150.46), Mastercard Inc. (MA + $28.79 to $639.10)

Some unusual call activity (~100:1 calls over puts on ~45x average daily volume at midday) is being seen in Eastman Chemical Co. (EMN + $0.80 to $67.47) which is primarily being driven by a 5,000 contract block that was bought on the November 20^th 70.00 call at the ask price of $1.50 (open interest is 1,129). 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.

Shares of Alphabet Inc. (GOOGL - $40.50 to $284.39) are under pressure this morning after the parent company of Google reported Q3 earnings of $2.12 per share, down from $2.87 a year earlier and below the $3.02 analysts were expecting. The company’s Q3 revenue increased 25% YoY to $127.6B, which was just below the $128B consensus estimate. Alphabet’s cloud growth increased 103% YoY, which yielded $11.1B in operating income on $30.7B in sales. However, cash flow for the quarter was negative $9.07B, well above the -$2.70B analysts were expecting. Calls are outnumbering puts ~3:2 with the October 30^th 290.00 call seeing the most action from traders (volume is 44,327).

Also trading to the downside this morning is ServiceNow Inc. (NOW - $37.65 to $112.48) after the Ai-empowered enterprise cloud services provider reported Q3 adjusted EPS of $1.00 ($0.02 miss) on Q3 revenue that increased 20.5% YoY to $4.106B (slightly above the $4.095B FactSet estimate). The company said that transactions over $5M in net new annual contract value increased 135% from the year-ago period. However, ServiceNow said that current remaining performance obligations (cPRO) are expected to grow 18.5% in the current quarter, which is down 2 percentage points from Q3. Calls are outnumbering puts nearly 2:1 with the November 20^th 120.00 call being the highest volume contract (volume is 13,874).

New 52-week lows (86 new lows today): AppLovin Corp. (APP - $2.01 to $257.96), C.H. Robinson Worldwide Inc. (CHRW - $3.52 to $124.08), Netflix Inc. (NFLX + $0.03 to $62.02)

Some unusual put activity (~10:1 puts over calls) is being seen in Carrier Global Corp. (CARR - $1.47 to $54.56) which is primarily being driven by a 9,900 contract block that was bought on the December 18^th 47.50 put for $0.55 when the bid/ask spread was $0.35 x $0.70 (open interest is 303). 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.

Shoe Station Group Inc. (SHOE + $0.24 to $14.69): Option volume is running at over 400x the daily average on this footwear retailer as option traders primarily target the December 18^th 16.00 put. Volume on this contract is 5,165 versus open interest of 0, so we know that all the volume represents fresh positioning (assuming no day trades). The bulk of the transactions consisted of various-sized blocks that were bought at various times for between $2.30-2.40 each, which suggests bearish intent.

Newell Brands Inc. (NWL + $0.07 to $5.28): Option volume is running at ~355x the daily average on this maker of consumer and commercial products which is primarily being driven by a couple of large blocks that simultaneously traded on the November 20^th expiration earlier this morning:

• 5.00 call (open interest is 639): A 31,250 contract block was bought at for $0.64 when the bid/ask spread was $0.40 x $0.75.
• 6.00 call (open interest is 2,583): A 31,250 contract block was sold at the bid price of $0.20.

We know that both these blocks are new positions based on the respective open interest figures, and it appears that a $1.00-wide bull call spread was established for a net debit of $0.44 (x 31,250 contracts x 100 multiplier, excluding commissions). The positioning suggests that the block trader believes that NWL will close above the break-even price of $5.44 at expiration. This bullish spread appears to be an “earnings play” as NWL is scheduled to report earnings tomorrow morning.

Norwegian Cruise Lines (NCLH + $2.14 to $18.20): Option volume is running at ~10x the daily average on this cruise liner as option traders primarily target the November 20^th 20.00 call. Volume on this contract is 7,782 versus open interest of 452, so we know that the volume primarily represents fresh positioning. The bulk of the transactions consisted of various mid-sized blocks that were bought around the same time at the ask price of $0.30 each, which suggests bullish intent. Shares of NCLH are trading ~13% higher after reporting quarterly results earlier this morning.

The Cboe Volatility Index (VIX – 0.60 to 16.31) has been on both sides of the unchanged line today (the intraday range is 16.27-17.36), as equity markets are er across the board around the midday mark (DJI - 211, SPX - 31, $COMP - 366, RUT + 28). VIX option volume has been average today at 435,321 contracts, and calls are outnumbering puts roughly 3:1 so far today.