Market Overview
U.S. stocks dropped for a third straight session and suffered a second straight week of losses on Friday (December 16) as fears continued to mount that the Federal Reserve's campaign to arrest inflation would tilt the economy into a recession.
For the week, the Dow lost 1.66%, the S&P fell 2.09% and the Nasdaq declined 2.72%.
Regarding the options market, a total volume of 45,778,899 contracts was traded, up 11% from the previous trading day.
Top 10 Option Volumes
Top 10: SPY, TSLA, QQQ, AAPL, AMZN, IWM, META, VIX, TQQQ, NVDA
Options related to equity index ETFs are still popular choices for investors, with 9.29 million SPDR S&P500 ETF Trust and 2.62 million Invest QQQ Trust ETF options contracts trading on Friday.
Total trading volume for SPY and QQQ are down 4% and 13%, respectively, from the previous day. 56% of SPY trades bet on bearish options.
Tesla Inc. shares Friday wrapped up their worst week since 2020, as Chief Executive Elon Musk sold billions in stock and faced a call from a prominent investor to step down from the helm of the electric-vehicle maker.
Tesla $(TSLA)$ stock fell 4.7% Friday for a weekly decline of 16.1%, the fourth-worst week in history for the shares after a series of three weeks in late February and early March 2020, when investors sold stocks in fear of the COVID-19 pandemic's effects. Tesla ended the week with a market capitalization of less than $500 billion for the first time since November 2020, and the share price nearly fell lower than $150 for the first time since that month, ending the week at $150.05.
There were 3.34 million Tesla options trading on Friday, and its trading volume was up 40% from the previous day. Open interest of stikes expiring Jan. 20, 2023 is particularly high, of which put options account for 51%.
Unusual Options Activity
Rivian's shares slumped after investors learned that it's pulling back from some previously announced growth plans. In September, Rivian announced plans for a joint venture electric van business in Europe with Mercedes-Benz Group. That project seemed like a natural extension of the company's U.S.-based electric delivery van production for Amazon. But recently, Rivian said that it's putting that partnership with Mercedes-Benz on pause to conserve capital for use in other areas of its business. Investors took that as a bad sign.
There were 200,014 Rivian options trading on Friday. Put options account for 75% of overall option trades. Particularly high volume was seen for the $20 strike put option expiring January 20, 2023, with 61,846 contracts trading on Friday.
Adobe Inc. said fourth-quarter revenue rose 10% on continued strong demand for its software and services. The company on Thursday also issued profit guidance for the current quarter that was better than Wall Street analysts projected.
There were 137,476 Adobe options trading on Friday. Call options account for 54% of overall option trades. Open interest for the $350 strike option is particularly high, of which 74% are call options.
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: T, UBER, NVDA, RIVN, HUT, JEF, MULN, CCJ, FENG, GH
Top 10 bearish stocks: F, AMZN, MPW, MRNA, MSFT, AMC, SNAP, SNY, VXX, PLTR
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