Today's Options Market Update

The final two days of the quarter are here with stocks up early as tech shares rebound slightly from their pullback. Though June has been a tough month, the S&P 500 Index is just 3% off all-time highs, and there've been glimmers of strength in non-tech areas.

Some of the selloff in the tech space may be related to quarter-end rebalancing by major market players such as pensions and sovereign wealth funds. The focus this week could turn slightly away from tech and toward the U.S. economy ahead of Thursday's June nonfarm payrolls report. That's a day earlier than usual ahead of Friday's U.S. closure for Independence Day.

Major indexes fell Friday and the tech-dominated Nasdaq Composite's losing streak reached five sessions. Choppiness returned as the Cboe Volatility Index (VIX) flirted with 20. Any move above that early this week might signal more weakness for the market, with investors focused again on Treasury yields and oil as the Middle East remains unsettled. The status of the ceasefire is a fresh wildcard after several weekend skirmishes, though the U.S. announced Sunday that hostilities are paused. This appeared to underpin early Wall Street gains.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is lower by ~1 basis points to 4.384%.

The U.S. Dollar Index ($DXY) is lower by 0.17 to 101.18.

WTI Crude Oil (/CL) August futures are higher by 1.62% to $70.35/barrel.

Gold prices have traded in a range of $4,012.00-4,102.90 and were last seen trading lower by ~1.42% to $4,038.30/oz.

Natural Gas prices for May futures have traded in a range of $3.171-3.313 today and were last seen trading lower by 3.17% to $3.175.

Bitcoin (BTC) is lower by ~0.41% over the last 24 hours to $59,235.20 today.

Shares of Casey’s General Stores Inc. (CASY + $21.87 to $800.50) are trading higher this morning after BMO Capital upgraded the convenience store operator to “Outperform” from “Market Perform” while keeping their $950.00 price target on the stock unchanged after meeting with CASY management. Analysts at BMO Capital said the valuation looks attractive following CASY’s ~16% post-earnings pullback. Calls are outnumbering puts ~4:1 (on low volume) with the August 21^st 790.00 call being the highest volume contract (volume is 50).

Also trading to the upside this morning is Roblox Corp. (RBLX + $7.05 to $54.61) after Arete upgraded the global gaming platform to “Buy” from “Neutral” and increased their price target on the stock to $95.00 from $75.00. Analysts at Arete see user growth and free cash flow at an inflection point and believe the company can leverage AI for age verification, parental controls and user safety measures. Calls are outnumbering puts ~5:2 with the July 21^st 65.00 call seeing the most action from traders (volume is 8,582).

New 52-week highs (143 new highs today): Airbnb Inc. (ABNB + $4.15 to $149.71), Edwards Lifesciences Corp. (EW + $1.08 to $91.86), Johson & Johnson (JNJ + $1.28 to $255.94)

Some unusual call activity (~10:1 calls over puts) is being seen in home, security and building products maker Fortune Brands Innovations Inc. (FBIN + $4.10 to $50.06) as option traders primarily target the July 17^th 55.00 call. Volume on this contract is 3,570 versus open interest of 26, so it’s likely that nearly all the volume represents fresh positioning. The bulk of the transactions consisted of various-sized blocks that were bought at various times for between $0.60-0.70 each, which suggests bullish intent. Shares of FBIN are trading nearly 9% higher this morning after the company named Jesse Singh as Chief Executive Officer (CEO) and to its Board of Directors. Singh previously served as CEO of The Azek Company and held prior roles at 3M and GE.

Shares of Liquidia Corp. (LQDA - $5.68 to $72.49) are moving lower this morning after Bank of America Securities (BofA) downgraded the biopharmaceutical company to “Neutral” from “Buy” while raising their price target on the stock to $79.00 from $64.00. Analysts at BofA cited valuation following the stock’s ~100% rally since the beginning of May. Puts are slightly outnumbering calls with the July 17^th 55.00 put being the highest volume contract (volume is 195).

Also trading to the downside this morning is Biohaven Ltd. (BHVN - $0.83 to $15.00) after Bank of America Securities (BofA) downgraded the biopharmaceutical company to “Underperform” from “Neutral” and lowered their price target on the stock to $11.00 from $12.00. Analysts at BofA cited concerns around Biohaven’s epilepsy drug. Calls are outpacing puts ~10:1 with the December 18^th 16.00 call being the highest volume contract (volume is 100).

New 52-week lows (73 new lows today): AT&T Inc. (T - $1.29 to $21.43), T-Mobile US Inc. (TMUS - $11.68 to $171.00), The Carlye Group Inc. (CG - $0.36 to $41.04)

Some unusual put activity (~10:1 puts over calls) is being seen in office Copart Inc. (CPRT - $1.64 to $28.92) which is primarily being driven by activity on the December 18^th 27.50 put. Volume on this contract is 9,197 (vs. open interest of 95), which included a 3,940 contract block that was bought at the ask price of $1.55 and (at a different time) a 1,070 contract block that was bought at the ask price of $1.50. We know that both these blocks are no positions based on the open interest figure and we can assume the intent is bearish in nature on both trades since they took place at the ask price.

Arxis Inc. (ARXS + $2.57 to $46.91): Option volume is running at ~198x the daily average on this maker of electronic and mechanical components for the aerospace and defense industry as option traders primarily target the February 2027 60.00 call. Volume on this contract is 3,551 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 $6.20-7.80 each, which suggests bullish intent.

Cognex Corp. (CGNX + $2.39 to $68.95): Option volume is running at ~96x the daily average on this provider of machine visions products to help automate manufacturing which is primarily being driven by activity on the July 17^th 75.00 call. Volume on this contract is 9,890 versus open interest of 1,912, so we know that the volume primarily represents fresh positioning. The bulk of the transactions consisted of various-sized blocks that were bought at various times for between $0.60-0.90 each, which suggests bullish intent.

LifeStance Health Group Inc. (LFST + $0.29 to $10.57): Option volume is running at ~25x the daily average on this provider of outpatient mental health services which is primarily being driven by a 4,000 contract block that was bought on the August 21^st 12.00 call at the ask price of $0.35 (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 bullish in nature since the trade took place at the ask price.

The Cboe Volatility Index (VIX - 0.57 to 17.84) has been on both sides of the unchanged line today (the intraday range is 17.79-19.45), as equity markets are higher around the midday mark (DJI + 228, SPX + 61, $COMP + 344). VIX option volume is below average today at 234,000 contracts, and calls are outpacing puts ~4:3 so far today.