Today's Options Market Update

Pressure returned to Wall Street and volatility flared early Friday as the January Producer Price Index (PPI) report sent another signal that inflation remains untamed, at least on the wholesale side. Headline PPI climbed 0.5% from December and core PPI, excluding food and energy, soared 0.8%, well above consensus of 0.3% for both.

"We continue to think that inflation is in the driver's seat when it comes to monetary policy over the coming Federal Reserve meetings, given the recent stabilization of the labor markets," said Collin Martin, head of fixed income research and strategy at the Schwab Center for Financial Research (SCFR). "This relatively hot PPI report supports the hawks a bit more than the doves as it suggests the next PCE report might come in a bit hot as well." That's a reference to the Personal Consumption Expenditures (PCE) price index, which the Fed monitors closely. Annual PPI growth of 2.9% topped the consensus of 2.6%, with services growth driving gains while goods prices fell. Odds of a rate cut next month were already nil even before PPI, while chances for a cut by mid-year stayed near 50% right after the data, according to the CME FedWatch Tool.

On Thursday, major indexes lost ground as Nvidia (NVDA) plunged 5% despite solid earnings. "Nvidia failing to push to new heights on strong results translates into a poor near-term risk-reward set-up for the AI trade," said Nate Peterson, director of derivatives research and strategy at SCFR. Still, financials, industrials, and small-caps found buyers. Nvidia's drop might reflect worries about mega caps' ability to continue their frenzied chip-buying, concerns about a concentrated customer base, and growing competition. It also seems to reflect growing investor caution across the tech space.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is lower by 3 bps to 3.98%.

The U.S. Dollar Index ($DXY) is lower by 0.16% to 97.63.

The CBOE Volatility Index^® (VIX) is up 7.19% to 19.97.

WTI Crude Oil (/CL) is higher by 2.24% to $66.67/barrel.

Bitcoin (BTC) is down by 2.15% to $66,310.

Ethereum (ETH) is down by 4.25% to $1,946.

Shares of Block Inc. (XYZ + $8.77 to $63.30) are higher by over 15.00% today after the financial technology company beat earnings and revenue estimates, raised its full-year outlook for gross profit, and said it was reducing its workforce by 40% in a bet on AI. Block reported Q4 adjusted net income of $0.65 per diluted share, up from $0.47 a year earlier, topping analyst estimates for $0.64. Revenue for Q4 rose to $6.25 billion from $6.03 billion a year earlier. Analysts had expected $6.23 billion, per Bloomberg.  Block now expects to deliver Q1 adjusted diluted EPS of $0.67 and sees 2026 adjusted diluted EPS of $3.66. Analysts expected $3.19.

In a more dramatic headline, Block announced plans to cut its current workforce by more than 40%, with plans to reduce its size from over 10,000 people to just under 6,000. The company described the move as a bet on artificial intelligence changing the future of labor productivity. Block's CEO, Jack Dorsey, said in a call with analysts that he believes many companies will ultimately have to make similar moves due to AI, per Bloomberg, "I don't think we're early to this realization," he said. "I think most companies are late. Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes."

Option trading in XYZ currently stands at 69,852 contracts, 15x the average daily volume with calls outpacing puts 2:1. Leading the way are the following trades, expirations, and strikes:

• February 27th, 2026, 65.00 call accounted for 5,092 contracts; open interest is 5,696 contracts.
• March 20th, 2026, 60.00 call accounted for 4,960 contracts; open interest is 26,913 contracts.
• February 27th, 2026, 60.00 call accounted for 4,291 contracts; open interest is 4,139 contracts.

New 52-week highs (256 new highs today): Xwell Inc. (XWEL + $0.41 to $1.77), Applied Optoelectronics Inc. (AAOI + $22.54 to $76.23), Figs Inc. (FIGS + $2.06 to $14.53), The Aes Corp. (AES + $1.13 to $17.38), First Majestic Silver (AG + $0.48 to $31.57)

Unusual call activity is noted today in Mineralys Therapeutics (MLYS - $0.22 to $28.81), as call volume currently stands at 23,070 contracts, 17x the average daily volume. Most of the activity can be attributed to a large block purchase of the 45.00 strike calls in the April 17th, 2026, expiration month. Traders paid $1.00 for 22,984 contracts in a single transaction when the bid/ask was $0.25 x $1.20. There were 13,983 contracts of open interest, so it's likely these are additions to long positions (suggesting bullish intent). The 45.00 strike is just below the 52-week high price of $47.65, set last November. Shares of MLYS have dropped nearly 40% from that point and currently sit at their 200-day SMA.

Another name exhibiting unusual call activity today is HF Sinclair Corp. (DINO - $2.83 to $47.91), as call volume has risen to 5,095 contracts in morning trading, 35x the average volume and 50x the put volume. Nearly all the volume can be attributed to a large call vertical purchase in the April 17th, 2026, expiration month. Traders bought 2,500 of the 50.00/60.00 call vertical spreads (5,000 total contracts) in a single transaction, paying $1.85 when the bid/ask was $1.00 x $2.40 (slightly above the mid-price. There were only 115 contracts of collective open interest, so we know this represents new positioning (suggesting bullish intent). Shares of DINO have fallen around 18.00% since the company released earnings on February 18th and now hover around the 200-day SMA.

Shares of Sunrun Inc. (RUN - $6.37 to $14.05) are down a whopping 31.00% today after the solar and storage company posted Q4 results that topped Wall Street forecasts but forecasted much slower growth ahead. Sunrun reported Q4 revenue jumped 124% year over year to $1.16 billion, topping estimates for $611 million, and EPS of $0.38. The company attributed the results to higher energy systems and product sales.

Investor concerns about higher financing costs, changing political trends, and weaker subscriber economics may have overshadowed the earnings beat. Per Bloomberg, subscriber additions fell 17% from the prior-year quarter to 25,475, while storage capacity and solar installations declined. In addition, Aggregate Subscriber Value dropped 18% year over year to $1.3 billion, and Net Subscriber Value decreased 30% as creation costs per new subscriber rose 8%.

Option trading in RUN currently stands at 93,054 contracts, 33x the average daily volume with puts outpacing calls 2:1. Leading the way are the following trades, expirations, and strikes:

• September 15th, 2026, 18.00 put accounted for 40,011 contracts; open interest is 40,023 contracts.
• March 20th, 2026, 15.00 call accounted for 10,604 contracts; open interest is 842 contracts.
• March 6th, 2026, 14.50 put accounted for 5,096 contracts; open interest is 11 contracts.

New 52-week lows (68 new lows today): Duolingo Inc. (DUOL - $17.17 to $100.18), Flutter Entertainment (FLUT - $19.61 to $103.55), Elastic N.V. (ESTC - $9.15 to $52.43), JD.com Inc. (JD - $0.39 to $26.59)

There is unusual put activity today in the iShares MSCI Canada ETF (EWC - $0.22 to $57.93). This activity equates to over 20,052 put contracts, 148x average daily put volume. A large block put vertical purchase in the June 18th, 2026, expiration accounted for nearly all the volume. Traders bought the 55.00/50.00 put vertical spread 10,000 times (20,000 total contracts), paying $0.68 for the transaction. With only 1,082 contracts of open interest, it is likely these trades represent new positions (suggesting bearish intent). Shares of EWC hit a 52-week high of $58.78 earlier today, so this trade could be a hedge against long shares, or a fade against the recent rally.

Unusual activity has also been detected in Hercules Cap Inc. (HTGC - $1.09 to $14.34), as put volume stands at 27,453 contracts, 50x average volume and 50x call volume, in morning trading. Multiple block purchases of the 14.00 strike puts in the March 20th, 2026, expiration, are driving most of the volume. Traders have paid between $0.20 to $0.40 for over 18,000 contracts, with most of the trades occurring at the offer price. There were only 3,724 contracts of open interest, so this represents new positioning (suggesting bearish intent). Shares of HGTC set a 52-week low price of $14.17 earlier today and are down nearly 25.00% year-to-date.

The Cboe Volatility Index (VIX + 1.34 to 19.97) is up by 7.19%, as equity markets are lower in early morning trading (DJI - 480, SPX - 36, COMPX - 185). VIX movement has occurred within a wide range today (the intraday range is 18.77 to 21.74). The highest volume contract is currently March 18th, 2026, 35.00 call (volume is 43,260 vs. open interest of 297,986).