Market Overview
U.S. stock indexes closed lower on Tuesday (May 16th) after a disappointing forecast from Home Depot and U.S. retail sales data for April pointed to softer consumer spending, while uncertainty about interest rates and debt limit negotiations weighed on sentiment.
Regarding the options market, a total volume of 33,007,890 contracts was traded, up 4.5% from the previous trading day.
Top 10 Option Volumes
Top 10: SPY; QQQ; Tesla; AMD; VIX; IWM; NVIDIA; Amazon; Microsoft; Alphabet
AMD shares rose 4.19% on Tuesday as investment firm Bernstein said the PC market looks to be "normalizing" at levels seen prior to the COVID-19 pandemic.
Analyst Stacy Rasgon noted that "The [roughly] 40M notebook shipments in [the March quarter] may have appeared horrendous given the [roughly] 60M units seen a year ago. However, it was dead in-line with pre-COVID Q1 levels," Rasgon wrote in an investor note. "We note that most PC forecasts have the industry returning to pre-COVID levels this year, a trajectory the industry appears to be on at the moment."
Rasgon also said that the average selling prices for CPUs are still falling as both Intel and AMD work to clear channel inventory, though the 19% declines look "particularly extreme" for AMD.
A total number of 1.14 million options related to AMD was traded, of which call options accounted for 49%. A particularly high open interest was seen for the $100 strike, with a total number of 214,087 open interest as of Tuesday, of which call options account for 80%.Source: Market Chameleon
Most Active Options
1. Most Active Trading Equities Options:
Special %Calls >70%: Alibaba; Microsoft; Intel; Petroleo Brasileiro
Special %Puts>70%: PacWest; Horizon Pharma
2. Most Active Trading ETFs Options
Special %Calls>70%: Nasdaq 100 Bear 3X ETF; iShares 20+ Year Treasury Bond ETF; VIX Short-Term Futures 1.5X ETF; iShares MSCI Brazil ETF
Special %Puts >70%: Industrial Select Sector ETF; $iShares iBoxx High Yield Corporate Bond ETF; Financial Select Sector SPDR Fund; inancial Select Sector SPDR Fund; SPDR S&P Regional Banking ETF
Unusual Options Activity
Sea Ltd.’s earnings missed estimates after gaming revenue plunged 43% and it swallowed a one-time charge of more than $100 million, putting the Southeast Asian internet firm under pressure to sustain profitability.
Its shares dived more than 17% on Tuesday. Despite posting its second consecutive quarterly profit, revenue grew just 5% and a goodwill impairment charge slashed net income to $88.1 million, missing the $224.4 million analysts expected.
A total number of 133,907 options related to Sea was traded, of which call options accounted for 58%.
Sea's net imbalance totalled up to -318,854, implying the highest volume of bearish activity from the biggest stock losers by option delta volume, which converts option volume to an equivalent stock volume (bought or sold).
TOP Bullish & Bearish Single Stocks
This report shows stocks with the highest volume of bullish and bearish activity by option delta volume, which converts option volume to an equivalent stock volume (bought or sold).
If we take the total positive option delta volume and subtract the total negative option delta volume, we will get the net imbalance. If the net imbalance is positive, there is more bullish pressure. If the net is negative, there is more bearish pressure.
Top 10 bullish stocks: M; COP; SCHW; BHC; CCL; GM; QCOM; TXN; AMC; KEY
Top 10 bearish stocks: TSLA; AMZN; PBR; PACW; UBER; AAPL; GOOG; CHPT; HZNP; SOFI
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