Market Overview
U.S. stocks rose on Tuesday after an unexpectedly small consumer price increase buoyed optimism that the Federal Reserve could soon dial back its inflation-taming interest rate hikes, but concerns remained the central back could stay aggressive.
The Dow Jones Industrial Average rose 0.3%, the S&P 500 gained 0.73% and the Nasdaq Composite added 1.01%.
Regarding the options market, a total volume of 42,392,701 contracts was traded on Tuesday, up 26.7% from the previous trading day.
Top 10 Option Volumes
Top 10: SPY, QQQ, TSLA, AAPL, AMZN, IWM, VIX, NVDA, TQQQ, AMD
There are 10.3 million SPY and 3.69 million QQQ options contracts trading on Tuesday. Their trading volumes rose 44.66% and 64.73% from the previous day separately. 53% of SPY trades bet on bearish options.
NVIDIA Corp rose 3.06% on Tuesday after Citi wondered whether the new chatbot ChatGPT could be a "Pokemon Go" moment for artificial intelligence.
Analyst Atif Malik, who has a buy rating and $210 price target on it, noted that investors have been wondering if ChatGPT is the "next killer data center AI application" and a meaningful driver for it. It's still too early to tell, Malik conceded, but the analyst noted that ChatGPT's language model is a "significant breakthrough" nonetheless.
There were 605,500 NVIDIA Corp options trading on Tuesday. Call options account for 53% of overall option trades. Particularly high volume was seen for the $190 strike call option expiring December 16th, with 42,774 contracts trading on Tuesday.
Unusual Options Activity
Moderna, Inc. surged 19.63% while Merck rose 1.78% as a combination of Moderna Inc's experimental melanoma vaccine and Merck & Co's blockbuster immunotherapy Keytruda cut the risk of skin cancer's recurrence or death by 44% compared with Keytruda alone in a mid-stage trial.
There were 241,900 Moderna, Inc. options trading on Tuesday, and its trading volume surged nearly 4 times from the previous day. Call options account for 63% of overall option trades. Particularly high volume was seen for the $200 strike call option expiring December 16th, with 12,028 contracts trading on Tuesday.
There were 350,200 Merck options trading on Tuesday, and its trading volume surged over 10 times from the previous day. Call options account for 96% of overall option trades. Particularly high volume was seen for the $108 strike call option expiring December 16th, with 8,122 contracts trading on Tuesday.
Pinterest, Inc. soared 11.9% on Tuesday as Piper Sandler analyst Thomas Champion moved his rating on it to overweight from neutral and bumped his price target to $30 from $25, noting that the company is likely to benefit from an improved advertising product and rising market share, as well as better trends for monthly active users and rising margins.
There were 174,500 Pinterest, Inc. options trading on Tuesday. Call options account for 75% of overall option trades. Particularly high volume was seen for the $56 strike call option expiring December 16th, with 5,752 contracts trading on Tuesday.
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: HYG, EEM, MSFT, XLE, UAL, FFIE, MULN, SQQQ, SOXL, CZR
Top 10 bearish stocks: TSLA, QQQ, SLV, NKLA, TQQQ, AMZN, MRK, KWEB, AMC, META
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