Market Overview
U.S. stocks ended up sharply on Wednesday as investors were optimistic ahead of an inflation report that could give the Federal Reserve room to dial back on its aggressive interest rate hikes.
The Dow Jones Industrial Average rose 0.8%, the S&P 500 gained 1.28%, and the Nasdaq Composite added 1.76%.
Regarding the options market, a total volume of 45,830,440 contracts was traded on Wednesday, up 45.03% from the previous trading day.
Top 10 Option Volumes
Top 10: SPY, TSLA, QQQ, AMZN, AAPL, BBBY, EEM, IWM, HYG, VIX
There were 8.56 million SPDR S&P 500 ETF Trust and 3.12 million Invesco QQQ Trust options contracts trading on Wednesday. SPDR S&P 500 ETF Trust’s trading volumes jumped 16.78% while Invesco QQQ Trust’s volume rose 53.69% from the previous day separately. 60% of SPDR S&P 500 ETF Trust trades bet on bearish options.
Amazon.com jumped 5.81% on Wednesday as it will expand “Buy with Prime” to all U.S. merchants by Jan. 31, allowing Prime members to shop on outside websites.
There were 2.2 million Amazon.com options trading on Wednesday, surging nearly 200% from the previous day. Put options account for 55% of overall option trades. Particularly high volume was seen for the $95 strike call option expiring January 13, with 51,551 contracts trading on Wednesday.
Unusual Options Activity
Bed Bath & Beyond continued to surge 68.6% on Wednesday as it showed a short interest of more than 20%, shares of several stocks that became the favorites of retail traders in 2021 and 2022 were coming back to life.
There were 997,700 Bed Bath & Beyond options trading on Wednesday, surging over 135% from the previous day. Call options account for 66% of overall option trades. Particularly high volume was seen for the $3 strike call option expiring January 13, with 70,310 contracts trading on Wednesday.
ARK Innovation ETF rose 3.39% on Wednesday as the Federal Reserve Bank of Boston's president Susan M. Collins stated that she was leaning toward raising interest rates by a quarter point at the central bank's next meeting.
There were 375,700 ARK Innovation ETF options trading on Wednesday, surging over 150% from the previous day. Call options account for 58% of overall option trades. Particularly high volume was seen for the $36 strike call option expiring January 20, with 72,754 contracts trading on Wednesday.
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: MSFT, AMZN, AAPL, GOOG, GOOGL, AMD, BAC, NFLX, XOM, NCLH
Top 10 bearish stocks: WBD, TSLA, F, ABBV, VZ, MGM, T, MS, PFE, GE
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