Market Overview
Wall Street's main indexes ended weaker on Wednesday (Dec. 28), with the Nasdaq hitting a 2022 closing low, as investors grappled with mixed economic data, rising COVID cases in China, and geopolitical tensions heading into 2023. The Dow Jones Industrial Average fell 1.1%; the S&P 500 lost 1.20%; and the Nasdaq Composite dropped 1.35%.
Regarding the options market, a total volume of 40,910,277 contracts was traded on Wednesday, up 49% from the previous trading day. Tesla, Alibaba and Amazon all saw several orders worth more than $100 million. AMC Entertainment also saw unusual options activity.
Top 10 Option Volumes
Top 10: SPY, TSLA, QQQ, AMZN, AAPL, IWM, NVDA, BABA, AMC, AMD
Options related to equity index ETFs are popular with investors, with 8.11 million SPDR S&P500 ETF Trust (SPY) and 3.23 million Invest QQQ Trust ETF (QQQ) options contracts trading on Wednesday.
Total trading volume for SPY and QQQ grew by 32% and 52%, respectively, from the previous day. 59% of SPY trades bet on bearish options.
Options trading of big tech stocks remained active on Wednesday. Tesla, Alibaba and Amazon all saw several orders worth more than $100 million.
Shares of Tesla Inc snapped a seven-session losing streak on Wednesday, in their rare rise this month on the way to what will be the electric-vehicle maker's worst year on record. The stock gained 3.3% on the day.
There are 4.9 million Tesla option contracts traded on Wednesday. Put options account for 63% of overall option trades. Particularly high volume was seen for the $110 strike put option expiring December 30, with 185,017 contracts trading.
Apple touched a new 52-week low on Wednesday, closing down more than 3%, as research firms continued to cut their estimates on the company's flagship iPhone 14 line.
There are 1.95 million Apple option contracts traded on Wednesday. Put options account for 62% of overall option trades. Particularly high volume was seen for the $130 strike call option expiring December 30, with 59,652 contracts trading.
Alibaba attracted attention as China eases travel restrictions, demolishes zero-COVID. Alibaba shares dropped almost 3% on Wednesday after Tuesday's about 5% gains. The Chinese e-commerce giant saw several option orders worth more than $100 million.
There are 592.6K Alibaba option contracts traded on Wednesday. Put options account for 89% of overall option trades. Particularly high volume was seen for the $210 strike put option expiring January 20, 2023, with 58,060 contracts trading.
Unusual Options Activity
Source: Market Chameleon
Like Tesla and Alibaba, Amazon also saw several option orders worth more than $100 million. Amazon shares dropped 1.5% on Wednesday and has fallen over 50% this year.
There are 2.22 million Amazon option contracts traded on Wednesday. Put options account for 82% of overall option trades. Particularly high volume was seen for the $110 strike put option expiring January 20, 2023, with 135,624 contracts trading.
AMC Entertainment also saw unusual options activity. The stock fell for four consecutive days, falling more than 85% this year. AMC Entertainment announcesd $110 million equity capital raise, a $100 million debt for equity exchange, and a proposed vote to convert AMC Preferred Equity (“APE”) units into AMC common shares and implement a reverse stock split last week.
There are 563.7K AMC Entertainment option contracts traded on Wednesday. Call options account for 63% of overall option trades. Particularly high volume was seen for the $6 strike put option expiring June 16, 2023, with 124,138 contracts trading.
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: QQQ, SPY, TLT, AMC, IQ, LUMN, ARKK, SPXS, UBER, SNAP
Top 10 bearish stocks: AAPL, AMZN, WBD, SLV, UVXY, NIO, TQQQ, XLE, BILL, IWM
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