Today's Options Market Update
Earnings Dominate With Cisco Later, Walmart Next
Attention flips from data and trade to earnings as investors await Cisco's (CSCO) results and stocks extend this week's massive rally. A host of firms report before the weekend, including Walmart (WMT), in earnings season's final stretch. Investors also have an eye on President Trump as he travels in the Middle East, and on Washington, D.C., where Congress hammers out a budget deal.
While the bulls stampeded on Wall Street early this week amid cooling trade tensions, there's concern about Treasury yields as they ascend. The yield surge to one-month highs reflects better long-term growth hopes and didn't respond much to yesterday's mild April Consumer Price Index (CPI) report. "The bond market and the Fed have to consider the impact of tariffs and expansive fiscal policy longer-term," said Kathy Jones, chief fixed income strategist at Schwab. "I wouldn't expect a significant down move in yields or change in Fed policy now. Later in the year, we look for lower yields and two rate cuts."
This week's Wall Street rally put valuations back into view as well. The forward price-to-earnings (P/E) ratio on the S&P 500 index (SPX) is now 22 and arguably factors in very little discount for potential risks. "Does that matter in the near term?" said Nathan Peterson, director of derivatives analysis at the Schwab Center for Financial Research. "Probably not. Sentiment can drive the near-term action longer than most anticipate."
Source: Schwab Center for Financial Research
Morning Rush
The 10-year U.S. Treasury yield (TNX) is higher today to 4.49%.
The U.S. Dollar Index ($DXY) is up slightly to 100.76.
The CBOE Volatility Index® (VIX) is basically unchanged at 18.35.
WTI Crude Oil (/CL) is down to $63.45//barrel.
Bitcoin (BTC) is lower by 1.65% to $103,535.
Ethereum (ETH) is falling by 4.37% today to $2,586.
Today's Bullish Activity
Shares of Septerna Inc. (SEPN + $3.69 to $10.42) are up over 55.00% today after the biotechnology company announced it is partnering with Novo Nordisk to develop oral pills for obesity in a deal worth up to $2.2 billion. Per Bloomberg, the partnership will start with four development programs targeting obesity, type 2 diabetes, and other diseases linked to obesity, with deal terms tied to progress and milestones. Septerna will look to combine its G protein-coupled receptors, or GPCR therapies with other common targets in weight loss including the GLP-1, GIP, and glucagon receptors.
Many see pills as a key driver for growth for medicines, and with Novo Nordisk in particular, it's an area where the company has struggled to keep pace with its rival Eli Lilly & Co. Novo does currently sell a pill version of Ozempic but at a fraction of the sales of the injected version of the drug.
Option trading in SEPN currently stands at 5,044 contracts, 1,600x the daily average, with calls outpacing puts 1.5:1. Leading the way are the following trades, expirations, and strikes.
- May 16th, 2025, 10.00 put accounted for 797 contracts; open interest is zero contracts.
- May 16th, 2025, 10.00 call accounted for 544 contracts; open interest is 41 contracts.
- June 20th, 2025, 12.50 call accounted for 417 contracts; open interest is one contract.
New 52-week highs (98 new highs today): Palantir Technologies Inc. (PLTR + $1.68 to $129.78), Boeing Company (BA + $2.59 to $206.01), Exelixis Inc. (EXEL + $6.83 to $43.78), Sea Ltd. (SE + $4.87 to $159.00), Tencent Music Entertainment (TME + $1.68 to $16.37)
Notable Call Activity
Unusual call activity is noted today in Vital Energy Inc. (VTLE + $0.02 to $18.25), as call volume currently stands at 5,880 contracts, 7x the average daily volume. Much of the activity can be attributed to activity in the June 20th, 2025, expiration month where 3,600 contracts were traded between the 17.50 and 20.00 call strikes. Traders appear to be rolling their long call positions from the 17.50 strike up to the 20.00 strike, as we've seen multiple block order trades occur involving the closing of one strike and the opening of the other. This can be seen in the June open interest, as 1,615 contracts have traded against 1,729 open contracts at the 17.50 strike while 2,500 contracts have traded against 150 open contracts at the 20.00 (suggesting bullish intent), That makes sense given shares of VTLE have risen nearly $6.00, or 48% since posting a 52-week low price of $12.30 on April 9th.
Other call activity of note can be seen today in JFrog Ltd (FROG + $0.62 to $42.80), as call activity has spiked to 4,836 contracts in morning trading (6x daily average). Nearly half of that volume stems from a large block trade in the September 19th, 2025, expiration month. Traders purchased 2,000 of September 19th, 55.00 calls at a price of $0.95 when the bid/ask was $0.75 x $0.95. We know this represents new positioning, as the open interest was 11 contracts (suggesting bullish intent). Shares of FROG have rallied over 22% since the company announced its earnings on May 8th. These traders may be betting on further upside for the shares.
Today's Bearish Activity
Shares of Global-E Online (GLBE - $6.24 to $36.15) are down over 14% after the application software company reported its Q1 results and affirmed its full-year forecast. For Q1, the company generated revenue of $189.9 million, +30% y/y, beating estimates for $187.8 million. The adjusted EBITDA was $31.6 million, +48% y/y, also beating estimates for $31.4 million. Global-E Online forecasts its yearly revenue to be $917 million to $967 million, versus estimates for $930.9 million, and sees its adjusted EBITDA at $179 million to $199 million, versus estimates for $184.9 million.
Also announced during the earnings call was a three-year strategic partnership agreement with Shopify. The new agreement renews the companies' long-standing strategic partnership for both their 1P (i.e. Shopify Managed Markets) and 3P solutions to empower international direct to consumer e-commerce on the Shopify platform.
Option trading in GLBE currently stands at 4,749 contracts in early morning trading, on pace for 5x the daily average, with calls outpacing puts 2:1. Leading the way are the following trades, expirations, and strikes:
- May 16th, 2025, 35.00 call accounted for 813 contracts; open interest is 914 contracts.
- May 16th, 2025, 40.00 call accounted for 653 contracts; open interest is 829 contracts.
- May 16th, 2025, 35.00 put accounted for 432 contracts; open interest is 1,424 contracts.
New 52-week lows (41 new lows today): Merck & Company (MRK - $1.63 to $75.00), Kraft Heinz Company (KHC - $0.33 to $27.26), PepSico Inc. (PEP - $1.88 to $128.43), General Mills (GIS - $0.60 to $53.17)
Notable Put Activity
Some unusual put activity is noted today in American Eagle Outfitters (AEO - $0.55 to $12.16). This activity equates to over 39,707 put contracts, 20x average daily put volume. Much of this volume can be attributed to a put diagonal between the June 20th and June 27th, 2025, expiration months totaling over 34,000 contracts. Traders rolled their short June 20th 10.00 strike puts down and out to the June 27th 9.00 strike. They were able to do this trade for an average debit price of $0.13 each. This allows them to move down their short put risk to the lower strike, but they had to pay the $0.13 and extend their duration by a week in order to do so. American Eagle Outfitter earnings are expected on 5/29.
Another example of unusual put activity occurred today in Foot Locker Inc. (FL - $0.25 to $13.06), as put volume stands at 15,468 contracts in morning trading, 30x average daily volume. Nearly all the volume can be attributed to activity in the January 16th, 2026, expiration month, as traders have transacted over 15,000 put contracts at the 10.00 strike. While there has been activity on both sides (buys and sells), the majority of the trading action has occurred on the sell side at an average price of $1.15 when the bid/ask was $1.15 x $1.25. Open interest was only 4,453 contracts, so we believe this activity represents new positioning (suggesting neutral to bullish intent).
Gauging Volatility
The Cboe Volatility Index (VIX + 0.11 to 18.33) has remained rangebound throughout the morning, as equity markets are mixed across the board (DJI - 50, SPX + 9, COMPX + 136). VIX movement has occurred within a narrow range today (the intraday range is 18.09 – 18.71). VIX option volume is elevated today, given its place as ninth on the "Top Volume by Underlying" list. The volume put/call ratio is currently 0.24, and the highest volume contract is the August 20th, 2025, 42.50 call (volume is 80,056 vs. open interest of 362,800).
Just getting started with options?
Explore more topics
Investors should consider carefully information contained in the prospectus, or if available, the summary prospectus, including investment objectives, risks, charges, and expenses. You can request a prospectus by calling 800-435-4000. Please read the prospectus carefully before investing.
Options carry a high level of risk and are not suitable for all investors. Certain requirements must be met to trade options through Schwab. Please read the Options Disclosure Document titled "Characteristics and Risks of Standardized Options." before considering any option transaction. Call Schwab at 1-800-435-4000 for a current copy. Supporting documentation for any claims or statistical information is available upon request.
Futures and futures options trading involves substantial risk and is not suitable for all investors. Please read the Risk Disclosure Statement for Futures and Options prior to trading futures products.
The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness, or reliability cannot be guaranteed.
Investing involves risk including loss of principal.
All references to subjects (securities, indexes, futures contracts, and options contracts) were derived based on screens conducted by the writer for certain anomalous activity such as volumes, volatility and other related market data. As needed for brevity, the writer may have applied discretion when choosing among screen outputs for inclusion. Such discretion may have been based on news reports or other considerations of public interest. The views or opinions are those of the writer, and are subject to change without notice. All referenced subjects were chosen for illustrative purposes only and should not be considered recommendations, offers to sell, or solicitations of offers to purchase.
All corporate names and market data shown above are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security.
Past performance is no guarantee of future results.
This information provided here is for general informational purposes only, and is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, you should consult with a qualified tax advisor, CPA, Financial Planner, or Investment Manager.
Schwab does not recommend the use of technical analysis as a sole means of investment research.
Indexes are unmanaged, do not incur management fees, costs, and expenses and cannot be invested in directly. For more information on indexes please see schwab.com/indexdefinitions.
The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.