Today's Options Market Update

Major indexes slid for the third straight day as tech shares weakened again early even as crude and Treasury yields eased. Home Depot (HD) fell despite earnings that topped expectations, while geopolitics stayed in the spotlight after President Trump said yesterday he'd postponed an attack on Iran planned for today to let negotiations continue.

In a switch from last week when tech stocks tracked higher and the broader market slipped, the S&P 500 Equal Weight Index (SPXEW) outpaced the S&P 500 Index Monday. Major indexes mostly retreated for the second straight day, sunk by tech again as market participants appear to be consolidating positions ahead of Nvidia's (NVDA) eagerly awaited earnings tomorrow afternoon. Friday and Monday were the worst two-day stretch for chips since last October, when selling ignited a dramatic rotation out of tech and into sectors that had long gone unappreciated.

The equal weight index weighs all components the same rather than by market capitalization, making it less reflective of mega-cap performance. Though it outpaced the S&P 500 Index yesterday, its weakness over the last two months suggests vulnerability if mega caps dive, with only 2% of S&P 500 stocks at 52-week highs. Only 5% are at four-week highs. "We have seen this narrowness and a lot of really rapid-fire rotation and churn under the surface," said Liz Ann Sonders, chief investment strategist at the Schwab Center for Financial Research (SCFR) on CNBC yesterday. "This is a scenario that could persist in the near term."

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is higher to by ~5 basis points 4.673%.

The U.S. Dollar Index ($DXY) is higher by 0.172 to 99.365.

WTI Crude Oil (/CL) June futures are lower by $0.06 to $108.60/barrel.

Gold prices have traded in a range of $4,467.10-4,593.20 and were last seen trading lower by ~1.22% to $4,502.90/oz.

Natural Gas prices for May futures have traded in a range of $3.006-3.107 today and were last seen trading higher by 2.22% to $3.091.

Bitcoin (BTC) is lower by ~0.59% over the last 24 hours to $76,486.79 today.

Shares of Eagle Materials Inc. (EXP + $4.45 to $201.08) are moving higher this morning after the construction materials maker reported fiscal Q4 adjusted earnings of $1.91 per share ($0.30 beat) on Q4 revenue that increased 1.90% year-over-year (YoY) to $479.1M (above the $451.786M consensus estimate). Option volume is relatively light with the July 17^th 185.00 put being the highest volume contract (volume is 62).

Also trading to the upside this morning is Amer Sports Inc. (AS + $1.53 to $34.68) after the sports apparel retailer reported Q1 adjusted EPS of $0.38 ($0.08 beat) on Q1 revenue that increased 32.65% YoY to $1.946B (above the $1.835B expected). The company also raised its full-year 2026 EPS guidance to a range of $1.18-1.23 (from $1.10-1.15) and FY26 revenue guidance to a range of $7.879-8.011B (from $7.617-7.748B). Calls are outpacing puts ~7:1 with the June 18^th 35.00 call seeing the most action from traders (volume is 3,783).

New 52-week highs (51 new highs today): Costco Wholesale Inc. (COST + $18.33 to $1,094.80), Datadog Inc. (DDOG + $2.41 to $211.23), Valero Energy Corp. (VLO + $0.24 to $258.76)

Some unusual call activity (~40:1 calls over puts) is being seen in software firm Freshworks Inc. (FRSH + $0.18 to $9.23) as option traders primarily target the June 18^th 10.00 call. Volume on this contract is 2,315 versus open interest of 1,592, so we know that we have some new positioning here. The bulk of the transactions consisted of various-sized blocks that were bought around the same time at the ask price of $0.45 each, which suggests bullish intent.

Shares of The Hanover Insurance Group Inc. (THG - $2.18 to $195.36) are trading lower this morning after BMO Capital downgraded the property and casualty insurance provider to “Market Perform” from “Outperform” while bumping their price target on the stock to $203.00 from $194.00. Analysts at BMO Capital said that valuation multiple “are nearing fair value for many insurers”, including THG, and said THG’s home insurance segment will bring more earnings volatility than other lines of insurance. Option volume is tepid at the time of this writing with the August 21^st 175.00 call being the highest volume contract (volume is 3).

Also trading to the downside this morning is Canadian Solar Inc. (CSIQ - $1.50 to $15.68) after Freedom Broker downgraded the maker of solar energy and battery energy storage products to “Hold” from “Buy” while maintaining their $16.00 price target on the stock. Analysts at Freedom said that the company’s Q1 margin beat was driven by tariff refunds and believe EPS and cash flow “remain weak”. Calls are slightly outnumbering puts with the May 22^nd 16.00 call garnering the most attention from traders (volume is 190).

New 52-week lows (171 new lows today): Builders FirstSource Inc. (BLDR - $2.54 to $67.64), Chewy Inc. (CHWY - $1.30 to $20.33), Home Depot Inc. (HD + $0.93 to $300.74)

Some unusual put activity (~20:1 puts over calls) is being seen in Infosys Ltd. (INFY + $0.17 to $12.76) which is primarily being driven by a couple of large blocks that simultaneously traded on the January 2027 expiration earlier this morning:

• 12.00 put (open interest is 3): A 5,550 contract block traded for $2.30 when the bid/ask spread was $1.05 x $2.35.
• 9.00 put (open interest is 150): A 5,550 contract block was bought at the ask price of $0.90.

We know that both these blocks are new positions based on the respective open interest figures, and (since the block trade on the 9.00 put took place at the ask price) it appears that a $3.00-wide bull put spread was established for a net credit of $1.40 (x 5,550 contracts x 100 multiplier, excluding commissions). The positioning suggests that the block trader believes that INFY will close above the $12.00 price level at expiration.

HealthStream Inc. (HSTM + $0.97 to $24.73): Option volume is running at over 320x the daily average on this healthcare software company as option traders primarily target the June 18^th 30.00 call. Volume on this contract is 7,821 versus open interest of 16, 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 $0.25-0.30 each, which suggests bullish intent.

BCE Inc. (BCE + $0.40 to $24.23): Option volume is running at ~53x the daily average on this provider of wireless, wireline, internet, and streaming services which is primarily being driven by a 4,500 contract block that was bought on the July 17^th 23.00 call for $0.50 when the bid/ask spread was $0.25 x $0.55 (open interest is 152). 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.

The Chemours Company (CC + $0.42 to $24.24): Option volume is running at ~34x the daily average on this chemical company which is primarily being driven by a couple of large blocks that simultaneously traded on the June 18^th expiration earlier this morning:

• 20.00 call (open interest is 177): A 16,650 contract block was bought for $2.69 when the bid/ask spread was $2.45 x $2.75.
• 25.00 call (open interest is 1,297): A 16,650 contract block was sold for $0.56 when the bid/ask spread was $0.50 x $0.65.

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 $2.13 (x 16,650 contracts x 100 multiplier, excluding commissions). The positioning suggests that the block trader believes that CC will close above the break-even price of $22.13 at expiration.

The Cboe Volatility Index (VIX + 0.06 to 17.88) has been on both sides of the unchanged line today (the intraday range is 17.66-18.36), as equity markets are lower around the midday mark (DJI - 183, SPX - 37, $COMP - 212). VIX option volume is roughly 3x the daily average today at 1,069,115 contracts, and calls are outpacing puts nearly 8:1 so far today.