Today's Options Market Update

Stocks have behaved well for Santa so far, though several days remain in what's traditionally the Christmas rally period. Major indexes stumbled early today on tech weakness and rising geopolitical tension that sent volatility up. Trading is truncated again this week due to Thursday's New Year's Day closure, meaning volume could remain thin, and trends might be tough to track.

For those sticking around, coming days offer a handful of economic clues. The Federal Reserve's minutes, reportedly scheduled for tomorrow afternoon, might provide clues into the outlook for interest rates among divided members of the central bank. The minutes could also shed light on economic projections policy makers delivered earlier this month, which were notably rosy in terms of inflation, growth, and unemployment. Two Treasury auctions occur today and tomorrow brings a reading on U.S. home prices. Wednesday is a normal trading day ahead of the holiday, closing at the usual time.

Major indexes fell Friday but finished just off intraday record highs. The S&P 500 index rose 1.4% last week, its fourth weekly advance in the last five, and is now up nearly 18% in 2025. The trend of decliners outpacing advancers continued Friday—potentially something to track for signs of a sentiment shift. That said, the S&P 500 Relative Strength Index (RSI) topped 61 by late Friday, well above mid-month lows that fell beneath 50. A reading of 61 is considered relatively strong but not overbought, and 61% of S&P 500 stocks now trade above their 50-day moving averages, a signal of improved fortunes for many stocks, not just the biggest whales.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is lower by ~1 basis points to 4.124%.

The U.S. Dollar Index ($DXY) is lower by 0.044 to 97.978.

WTI Crude Oil (/CL) is higher by 2.52% to $58.17/barrel.

Gold prices have traded in a range of $4,344.60-$4,581.30 and were last seen trading lower by ~4.37% to $4,353.70/oz.

Natural Gas prices have traded in a range of $4.351-4.556 today and were last seen trading higher by 4.35% to $4.556.

Bitcoin (BTC) is lower by ~0.38% to $87,596.37 today.

Leading the point gainers list this morning is Praxis Precision Medicines Inc. (PRAX + $40.70 to $309.65) following news that the U.S. Food & Drug Administration (FDA) has granted breakthrough-therapy designation for the company experimental drug (ulixacaltamide) to treat patients with essential tremor. Back in October PRAX reported a couple of Phase 3 studies on ulixacaltamide that met their primary endpoints and the company said that it expects to file for FDA approval of the drug in early 2026. Option volume is relatively light with the January 16^th 320.00 put being the highest volume contract (volume is 25).

Also trading to the upside this morning is Lululemon Athletica Inc. (LULU + $2.44 to $211.41) following news that founder Chip Wilson is launching a proxy fight to remake LULU’s board of directors while the company searches for a new chief executive officer. Wilson said that he has nominated three director candidates – On Running co-CEO Marc Maurer, former ESPN Chief Marketing Officer Laura Gentile and former Activision CEO Eric Hirshberg. Calls are outnumbering puts ~2:1 with the January 16^th 230.00 call leading the way (volume is 626).

New 52-week highs (29 new highs today): Chubb Ltd. (CB + $0.38 to $313.85), Dollar General Corp. (DG + $0.46 to $138.30), Merck & Company (MRK + $0.33 to $107.11)

Some unusual call activity (~6:1 calls over puts) is being seen in eBay Inc. (EBAY + $1.29 to $86.50) as option traders primarily target the January 9^th 87.00 call. Volume on this contract is 2,465 versus open interest of 4, so it’s likely that nearly all the volume represents fresh positioning. The majority of the transactions consisted of various-sized blocks that were bought at various times for between $1.09-1.13 each, which suggests bullish intent.

Shares of Ultragenyx Pharmaceutical Inc. (RARE - $13.94 to $20.25) are under pressure this morning after the biopharmaceutical company said that its Phase 3 studies of its experimental drug (setrusumab) to treat brittle bone disease failed to meet the primary endpoints of reduction in annualized clinical fracture rate compared to the placebo group or bisphosphonates. RARE said that the drug achieved secondary improvements in bone mineral density against comparators and is evaluating next steps. Calls and puts are trading roughly even with the February 20^th 35.00 call seeing the most action from traders (volume is 2,090).

Also trading to the downside this morning is Nvidia Inc. (NVDA - $3.45 to $187.08) following news that the AI chip maker has entered into an agreement to license technology from privately held artificial intelligence chip maker Groq. According to reports from CNBC and The Information, the nonexclusive license values Groq at around $20B and will involve Nvidia hiring many of Groq’s key employees. Calls are outpacing puts nearly 2:1 with the January 2^nd 190.00 call being the highest volume contract (volume is 69,028).

New 52-week lows (98 new lows today): Brown Forman Inc. (BF/A + $0.08 to $26.22), ChargePoint Holdings Inc. (CHPT - $0.05 to $7.03), Microalgo Inc. (MLGO - $0.28 to $5.41)

Some unusual put activity (~2:1 puts over calls) is being seen in Cameco Corp. (CCJ + $0.41 to $93.25) which is primarily driven by a 6,890 contract block that was sold on the January 30^th 77.00 put for $0.47 when the bid/ask spread was $0.06 x $1.00 (open interest is 0). We know that this block is a new position based on the open interest figure, and we can assume that the block trader believes that CCJ will close above the $77.00 price level and/or is comfortable taking a long 689,000 share position at an effective purchase price of $76.53 if CCJ closes below $77.00 at expiration.

Etsy Inc. (ETSY + $0.67 to $56.43): Option volume is running at ~9x the daily average on this e-commerce marketplace as option traders primarily target the January 9^th 58.00 call. Volume on this contract is 2,010 versus open interest of 97, so we know that the activity primarily represents new positioning. The bulk of the transactions consisted of various-sized blocks that were bought at various times for between $0.82-0.87 each, which suggests bullish intent.

On Holding AG (ONON + $0.77 to $47.56): Option volume is running at ~8x the daily average on this shoe and apparel maker as option traders primarily target the January 2^nd 49.00 call. Volume on this contract is 11,120 versus open interest of 83, so we know that the activity primarily represents fresh positioning. The bulk of the transactions consisted of various-sized blocks that were bought at various times for between $0.20-0.37 each, which suggests bullish intent.

Pan American Silver Corp. (PAAS - $2.78 to $52.61): Option volume is running at ~4x the daily average on this mining company as option traders primarily target the February 20^th 55.00 call. Volume on this contract is 2,140 versus open interest of 1,113, 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 $3.70-4.00 each, which suggests bullish intent. 

The Cboe Volatility Index (VIX + 1.03 to 14.63) has been in positive territory all day today (the intraday range is 14.53-15.08), as equity markets are lower across the board around the midday mark (DJI - 277, SPX - 34, $COMP - 164). VIX option volume is below average today at 228,031 contracts, and calls are outpacing puts ~9:1 so far today.