Today's Options Market Update
Stocks Sustain Bullish Momentum Following Cool CPI Report
April U.S. consumer prices showed little impact from trade policy as the Consumer Price Index (CPI) rose 0.2% for both headline and core inflation. That was better than analysts' average expectations of 0.3% for each, and annual inflation dropped to 2.3%, below the 2.4% Wall Street forecast. Core excludes volatile energy and food prices. "Good news on inflation," said Cooper Howard, director, fixed income strategy at the Schwab Center for Financial Research.
Though the tariff easing that sparked Monday's impressive rally doesn't end all uncertainty and major indexes were mixed early today despite CPI, it hints there's light at the end of the tunnel. This could mean the groundwork being laid for companies to consider resuming some of the spending that stalled but doesn't necessarily turn the spigot on all the way. Some things to monitor are whether companies announce any new capital spending and if there's any reacceleration in earnings revisions after recent guidance cuts. Either or both could potentially mean more upside for the market. Meanwhile, Goldman Sachs (GS) has cut its U.S. recession odds to 35% from 45%, media reports said.
U.S. Treasury Secretary Scott Bessent expects to meet again with Chinese officials in coming weeks, and those talks could help set market direction—perhaps more than reports like CPI and Thursday's April retail sales, which now reflect activity when tariffs on Chinese goods were far higher. "Both sides recognized that the sky-high tariffs were not a realistic long-term position," said Michael Townsend, managing director, legal and government affairs at Schwab. "Bessent was a key negotiator and seems to have settled into a role as the president's top economic advisor—something that the markets are welcoming."
Source: Schwab Center for Financial Research
Morning Rush
The 10-year U.S. Treasury yield (TNX) is higher by ~2 basis points to 4.481%.
The U.S. Dollar Index ($DXY) is lower by 0.56 to 101.23.
WTI Crude Oil (/CL) is higher by 1.76% to $63.04/barrel.
Gold prices have traded in a range of $3,220.10-$3,270.40, last seen trading higher by 0.59% to $3,246.90/oz.
Natural Gas prices have traded in a range of $3.57-3.728 and were last seen trading lower by 1.89% to $3.577.
Bitcoin (BTC) is higher by ~0.84% over the past 24 hours to $103,631.30.
Today's Bullish Activity
Leading the point gainers list this morning is Coinbase Global Inc. (COIN + $38.31 to $245.53) following news that the cryptocurrency exchange will be added the S&P 500 index. COIN is replacing Discover Financial, which is being acquired by Capital One, and changes will become effective prior to the market open on May 19th. Calls are outnumbering puts ~4:1 with the May 16th 260.00 call seeing the most action from traders (volume is 29,755).
Also trading to the upside this morning is First Solar Inc. (FSLR + $35.05 to $191.26) after Wolfe Research upgraded the solar panel maker to "Outperform" from "Peer Perform" and set a $221.00 price target on the stock. Analysts at Wolfe Research said the move follows better clarity on the 45X credit rules, which offers tax incentives to companies making clean energy products, like FSLR. The firm believes FSLR stands to earn $10B of credits through 2031. Calls are outnumbering puts ~3:1 with the May 16th 140.00 call being the highest volume contract (volume is 5,283).
New 52-week highs (88 new highs today): Boeing Co. (BA + $5.65 to $204.18), MercadoLibre Inc. (MELI + $43.25 to $2,547.86), Uber Technologies Inc. (UBER + $2.78 to $90.88)
Notable Call Activity
Some unusual call activity (~25:1 calls over puts) is being seen in DLocal Ltd. (DLO + $0.21 to $9.80) which is primarily being driven by activity on the June 20th 9.00 call. Volume on this contract is 5,095 versus open interest of 48, so it's likely that nearly all the volume represents new positioning. The majority of the volume is being attributed to a 3,840 contract block that was bought for $1.25 when the bid/ask spread was $1.15 x $1.30, which suggests bullish intent.
Today's Bearish Activity
Leading the point decliners list this morning is Dow-component United Health Group Inc. (UNH - $60.83 to $317.92) following news that CEO Andrew Witty has resigned for personal reasons and the company's subsequent decision to withdraw 2025 financial guidance. The company appointed former UNH CEO and current Chairman Stephen Hensley to replace Witty. Shares of UNH are trading at the lowest levels since 2020 following the news. Calls are outnumbering puts ~2:1, but the May 16th 300.00 put is the highest volume contract (volume is 11,559).
Also trading to the downside this morning is Johnson & Johnson (JNJ - $5.14 to $149.00) after Leerink Partners downgraded the healthcare conglomerate to "Market Perform" from "Outperform" and cut their price target on the stock to $153.00 from $169.00. Analysts at Leerink said the move was prompted by lowered expectations around price controls on JNJ's Darzalex Faspro drug. Calls are outnumbering puts ~2:1 with the May 16th 152.50 call leading the way (volume is 1,690).
New 52-week lows (53 new lows today): Campbell's Company (CPB - $0.66 to $35.28), General Mills Inc. (GIS - $1.22 to $5.30), PepsiCo Inc. (PEP - $1.11 to $130.57)
Notable Put Activity
Some unusual put activity (~3:1 puts over calls) is being seen in Alcon Inc. (ALC - $0.56 to $94.23) which is primarily being driven by activity on the June 20th 92.50 put. Volume on this contract is 2,245 versus open interest of 9, 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 around the same time at the ask price of $2.60 each, which suggests bearish intent.
Volume Signals
Mirion Technologies Inc. (MIR + $0.48 to $17.43): Option volume is running at ~60x the daily average on this maker of radiation detection, measurement, analysis and monitoring products which is primarily being driven by a 3,000 contract block that was bought on the November 21st 22.50 call for $0.70 when the bid/ask spread was $0.00 x $0.75 (open interest is 43). We know that this block is a new position based on the open interest figure, and we can assume the intent is bullish in nature since the trade took place above the midpoint of the bid/ask spread.
BJ's Restaurants Inc. (BJRI + $1.17 to $42.72): Option volume is running at ~43x the daily average on this operator of full-service restaurants which is primarily being driven by a 1,000 contract block that was bought on the October 17th 45.00 call for $3.50 when the bid/ask spread was $1.35 x $4.80 (open interest is 0). We know that this block is a new position based on the open interest figure, and we can assume the intent is bullish in nature since the trade took place above the midpoint of the bid/ask spread.
Rapid7 Inc. (RPD - $1.69 to $25.05): Option volume is running at ~15x the daily average on this cybersecurity company which is primarily being driven by a 3,000 contract block that was bought on the August 15th 27.00 call at the ask price of $2.00 (open interest is 2). We know that this block is a new position based on the open interest figure, and we can assume the intent is bullish in nature since the trade took place at the ask price.
Gauging Volatility
The Cboe Volatility Index (VIX – 0.46 to 17.93) has been on both sides of the unchanged line today (intraday range is 17.65-18.85), as equity markets are mixed around the midday mark (DJI - 190, SPX + 48, COMP + 312). VIX option volume is above average today at 826,626 contracts, which puts the index at the #7 spot on the "Top Volume by Underlying" list. The volume put/call ratio is currently 0.85, but the highest volume contract is the May 21st 17.00 put (volume is 42,544 vs. open interest of 152,466).
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.