U.S. stocks closed lower on Tuesday (Apr. 28), backing away from record closing highs as renewed concerns over the artificial intelligence boom weighed on technology stocks days before five of the sector's most high-profile companies were due to post quarterly results.
Regarding the options market, a total volume of 53,626,166 contracts was traded, of which 59% were call options.
Top 10 Option Volumes
Top 10: NVDA, VIX, TSLA, NFLX, INTC, AMZN, AAPL, SOFI, MSFT, PLTR
AMD stock closed at $323.21, down 3.41% from the previous session. In a high implied volatility environment, institutional trading activity shows a clear preference for selling out-of-the-money options to collect premium. Specifically, multiple put-selling transactions suggest a longer-term bullish stance or a willingness to accumulate shares at lower levels, while a large-scale sale of near-term call options indicates caution toward significant upside in the short term.
A notable example is the sale of deep out-of-the-money, long-dated put options, reflecting a long-term bullish positioning. The trade involves selling 1,250 contracts of Advanced Micro Devices March 19, 2027 $250 put options at a price of $29.95, resulting in a total transaction value of approximately $3.74 million.
Source: Tiger Trade App
It signals strong confidence in the stock’s long-term outlook or stability, as the trader is effectively willing to take ownership of the shares at an implied breakeven level of $220.05. The approach is similar to a cash-secured put strategy used to build a position at a discounted entry point.
Overall, market sentiment reflected in this trade is clearly bullish over the long term, with the view that the probability of the stock declining sharply toward the $220 level is relatively low.
Unusual Options Activity
Shares of Oracle Corporation closed at $165.96, down 4.05%. Recently, the options market for Oracle has seen notable block trading activity, reflecting a divergence in market sentiment. On one hand, some traders bought near-term put options as a hedge or bearish bet. On the other hand, others collected as much as $2.4 million in premium by selling longer-dated put options, signaling a neutral-to-bullish outlook over the medium to long term.
Overall, the market reflects a mix of short-term risk aversion and longer-term premium-harvesting strategies.
A notable example of short-term hedging or bearish positioning is the aggressive purchase of near-term put options. The trade involves buying the May 1, 2026 $177.50 put option on Oracle, with a total transaction value of approximately $1.85 million.
Source: Tiger Trade App
This trade was executed close to expiration, with roughly one week remaining, and targets a relatively out-of-the-money strike (as the strike price of $177.50 is above the current share price of $165.96). The breakeven level for the position is $165.45, suggesting the trade is either an active bearish bet on a protective hedge for an existing position, anticipating that the stock could fall below $165.45 in the near term.
Comments