Today's Options Market Update

Crude oil wobbled and major indexes climbed to start the week after Iran said it might be willing to pursue diplomacy, The Wall Street Journal reported. Early gains after a weekend of Middle East escalation included chip stocks approaching a host of earnings that could help set direction for the struggling sector.

Technically, we're oversold in the Nasdaq-100® and the PHLX Semiconductor Index (SOX), so it wouldn’t surprise me to see some mean reversion at some point this week, especially if Alphabet announces strong, or increased, CapEx guidance.

Wall Street cratered Friday and sector action was dismal, with only energy up as oil price fears gripped the market and fighting escalated with nine straight days of U.S. strikes. Major indexes fell across the board last week, though Treasury yields eased slightly. The Federal Reserve enters its quiet period ahead of next week's meeting. As of early today, chances of a rate pause are 88%, according to the CME FedWatch Tool. "We expect the Fed to remain on hold for the next handful of meetings," said Collin Martin, head of fixed income research and strategy at SCFR.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is higher by ~4 basis points to 4.582%.

The U.S. Dollar Index ($DXY) is higher by 0.21 to 100.97.

WTI Crude Oil (/CL) August futures are lower by 0.32% to $82.23/barrel.

Gold prices have traded in a range of $3,986.50-4,046.00 and were last seen trading lower by ~0.10% to $4,014.70/oz.

Natural Gas prices for August futures have traded in a range of $2.832-2.91 today and were last seen trading lower by 2.10% to $2.85.

Bitcoin (BTC) is lower by ~0.67% over the last 24 hours to $64,254.30 today.

Shares of Domino’s Pizza Inc. (DPZ + $18.82 to $341.00) are trading at a two-month high this morning after the pizza delivery giant reported Q2 EPS of $4.07 ($0.13 miss) on Q2 revenue that increased 4.28% year-over-year (YoY) to $1.194BB (above the $1.179B consensus estimate). Domino’s Q2 gross margin decreased to 40.0% from 40.3%, but supply chain gross margin improved by 20 basis points to 12.0%.  Calls are outnumbering puts ~3:2 with the August 21^st 360.00 call being the highest volume contract (volume is 522).

Also trading to the upside this morning is Alphabet Inc. – Class A (GOOGL + $11.76 to $358.53) following a report from the Information that the company is developing a new server chip, internally called “Frozen v2”, to help run its Gemini models more efficiently. The chip would permanently embed parts of Gemini’s architecture directly into silicon, which will reduce the number of calculations and amount of data movement required to answer queries according to the report. The deployment date for the chip is expected sometime in 2028. Calls are outnumbering puts better than 2:1 with the July 20^th 360.00 call seeing the most action from traders (volume is 36,874).

New 52-week highs (68 new highs today): Brinkler International Inc. (EAT + $3.35 to $192.70), Phillips 66 (PSX + $1.50 to $208.36), Yeti Holdings Inc. (YETI + $0.38 to $51.43)

Some unusual call activity (~10:1 calls over puts) is being seen in Sharplink Inc. (SBET + $0.44 to $6.11) which is primarily being driven by an 8,260 contract block that was bought on the July 31^st 5.50 call for $0.57 when the bid/ask spread was $0.52 x $0.59 (open interest is 2,402). 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 above the midpoint of the bid/ask spread.

Shares of Ryanair Holdings PLC (RYAAY - $3.72 to $58.85) are trading lower this morning after the Ireland-based airliner reported fiscal Q1 EPS of $1.19 ($0.16 miss) on Q1 revenue that increased 3.64% YoY to $5.097B (below the $5.21B consensus estimate). Regarding guidance, RYAAY said it expects fiscal 2027 passenger traffic to grow 4% YoY. Calls are slightly outnumbering puts with the August 21^st 70.00 call seeing the most action from traders (volume is 136).

Also trading to the downside this morning is ServiceNow Inc. (NOW - $2.72 to $100.52) after CLSA initiated coverage on the workflow management software provider with an “Underperform” rating and put a $72.00 price target on the stock. Analysts at CLSA cited valuation, noting that expectations are lofty heading into the company’s earnings report, which could limit near-term upside. Calls are outnumbering puts ~2:1 with the July 24^th 99.00 call leading the way (volume is 2,317).

New 52-week lows (92 new lows today): Blue Owl Technology Finance Corp. (OTF - $0.10 to $10.00), Capri Holdings Ltd. (CPRI - $0.42 to $15.96), Intuitive Surgical Inc. (ISRG + $1.94 to $347.36)

Some unusual put activity (~100:1 puts over calls) is being seen in climate and energy solutions provider Carrier Global Corp. (CARR - $0.92 to $67.77) which is primarily being driven by a couple of large blocks that simultaneously traded on the July 31^st expiration earlier this morning:

• 65.00 put (open interest is 5): A 4,980 contract block was bought for $1.59 when the bid/ask spread was $1.20 x $1.65.
• 57.00 put (open interest is 3): A 4,980 contract block was sold for $0.20 when the bid/ask spread was $0.05 x $0.70.

We know that both these blocks are new positions based on the respective open interest figures, and it appears that a $8.00-wide bear put spread was established for a net debit of $1.39 (x 4,980 contracts x 100 multiplier, excluding commissions). The positioning suggests that the block trader believes that CARR will close below the break-even price of $63.61 at expiration. CARR is scheduled to report Q2 earnings on July 28^th before the bell, so this bearish positioning captures the potential impact of that event.

VNET Group Inc. (VNET + $0.36 to $7.75): Option volume is running at ~15x on this provider of data center hosting and related services in China which is primarily being driven by a couple of large blocks that simultaneously traded on the December 18^th expiration earlier this morning:

• 10.00 call (open interest is 638): A 2,000 contract block was bought at the ask price of $1.05.
• 15.00 call (open interest is 390): A 2,000 contract block was sold for $0.25 when the bid/ask spread was $0.05 x $0.45.

We know that both these blocks are new positions based on the respective open interest figures, and it appears that a $5.00-wide bull call spread was established for a net debit of $0.80 (x 2K contracts x 100 multiplier, excluding commissions). The positioning suggests that the block trader believes that VNET will close above the break-even price of $10.80 at expiration.

On Holding AG (ONON + $0.50 to $37.70): Option volume is running at ~9x on this sports products maker which is primarily being driven by activity on the January 2027 50.00 call. Volume on this contract is 21,348 versus open interest of 3,733, 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 at the ask prices of $1.78 & $1.79 each, which suggests bullish intent.

Pentair PLC (PNR - $0.19 to $62.26): Option volume is running at over ~6x the daily average on this maker of automobile components as option traders primarily target the February 2027 90.00 call. Volume on this contract is 3,718 versus open interest of 3,019, so we know that we have some new positioning here. The bulk of the transactions consisted of various-sized blocks that were bought at various times for between $0.70-0.85 each. Given the far-dated expiration date, it’s likely that the buying represents fresh bullish positioning, rather than closing out prior positioning.

The Cboe Volatility Index (VIX + 1.32 to 18.05) is up by 7.89% today, as equity markets are lower this morning (DJI - 162, SPX - 52, COMPX - 294). VIX movement has occurred within a wider range today (the intraday range is 17.68 to 19.50). The highest volume contract is currently the July 22^nd, 2026, 17.00 put (volume is 77,451 vs. open interest of 160,256).