U.S. stocks ended higher Thursday (August 18) with the major averages logging modest gains following another choppy session for U.S. stocks. The S&P 500 was up 0.23%, the Dow up just less than 0.1%, and the Nasdaq up 0.21%.
Options Broad View
About $2 trillion of options are set to expire on Friday, obliging holders to either roll over existing positions or start new ones.
A total volume of 32,606,462 contracts were traded on Thursday, down 18% from the previous day. Broadly speaking, bullish contracts have been changing hands faster than bearish ones, with call options accounting for 55% of total options trades.
There are 4.42 million SPDR S&P500 ETF Trust options traded on Thursday. Call options account for 60% in overall option trades, 18% higher than the previous day.
Top 10 Option Volumes
Top 10: SPY, QQQ, BBBY, AAPL, TSLA, IWM, AMZN, AMC, AMD, NVDA
Options related equity indexes are still top choices for investors, with 1.88 million Invest QQQ Trust ETF options contracts trading on Thursday.
Total trading volume for SPY and QQQ, however, slide sharply from the previous day. SPY only trades 61% of overall options from the previous day, partly for the reason that the Cboe Volatility Index has averaged 21 in August, on course for its lowest level since November.
Bed Bath & Beyond stock closes 20% lower and tumbles 45% in after hours trading, prompting a volume of 1.36 million options contracts traded on Thursday. Particularly high volume was seen for the $20 strike call option expiring this Friday, with 59,447 contracts trading on Thursday. However, there are still 19,711 long positions unclosed as to Thursday.
According to a regulatory filing, GameStop chairman Ryan Cohen’s RC Ventures cut its entire stake in the retailer. RC Ventures sold almost 8 million shares on Tuesday and Wednesday at prices ranging from $18.68 to $29.22.
The news comes after it was disclosed on Thursday that RC Ventures had filed for the right to sell its 9.45 million shares of Bed Bath & Beyond (BBBY) through JP Morgan Securities.
Shares of AMC Entertainment tumble 9.7% on Thursday, prompting a volume of 607.8K options contracts traded on Thursday. Particularly high volume was seen for the $18.5 strike put option expiring this Friday, with 45,045 contracts trading on Thursday. Call options account for 54% in overall option trades.
Unusual Options Activity
In addition to Meme stocks, options interest in Cisco Systems also show an increase, with 274,269 contracts trading on Thursday. Calls are outnumbering puts ~4:1with the August 19th 50.00 call being the highest volume contract (volume is 29,532). Looking ahead, the company expects Q4 revenue to come in a range of ~$13.16-13.42B (above the $12.85B expected).
There is a call option sweep with bullish sentiment regarding Cisco Systems. It expires in 64 days on October 21, 2022. Parties traded 6,000 contracts at a $45.0 strike. The total cost received by the writing party was $2.97 million, with a price of $495 per contract.
Regarding Block, there is a put option sweep with bearish sentiment. It expires in 29 days on September 16, 2022. Parties traded 5,500 contracts at a $85.0 strike. The total cost received by the writing party was $4.86 million, with a price of $885 per contract.
For Alphabet-Class A stock, there is a call option sweep with bullish sentiment. It expires this Friday. Parties traded 11,000 contracts at a $117.5 strike. The total cost received by the writing party was $2.64 million, with a price of $240 per contract.
Kohl’s Corp. slid 7.7% after the department store chain reported Q2 earnings of $1.11 per share ($0.01 miss) on revenue that fell 8.1% year-over-year to $4.09B (above the $3.91B expected). The company issued downside guidance as full-year 2023 EPS is expected to come in a range of $2.80-3.20 on revenue that is expected to come in a range of $17.36-17.55B versus the respective $4.19 and $17.78B consensus estimates. Calls are outnumbering puts ~4:3 with the August 19th33.00 call seeing the most action from traders (volume is 5,342).
ON Semiconductor Corp. option volume is running at nearly 5x the daily average on this chip maker which is primarily being driven by activity on the November 18th 60.00 put. Volume on this contract is 37,983 versus open interest of 1,074, so we know that the volume primarily represents new positioning. The bulk of the transactions on this contract consisted of various-sized blocks that were being bought at various times for between $2.70-3.10 each, which suggests bearish intent.
TOP Bullish & Bearish Single Stocks
Top 10 bullish stocks: SNAP, MNMD, BBIG, Z, META, SQ, BBBY, CEI, NFLX, TWTR
Snap saw options trading volume of 62.8 million contracts, call options account for 60%. Particularly high volume was seen for the $13 strike call option expiring this Friday, with 28,977 contracts trading on Thursday, representing approximately 2,897,700 underlying shares of SNAP.
Meta saw options trading volume of 367,075 contracts, call options account for 50%. Particularly high volume was seen for the $175 strike call option expiring this Friday, with 29,115 contracts trading on Thursday, representing approximately 2,911,500 underlying shares of META.
Top 10 bearish stocks: CSCO, AAPL, PBR, NVDA, AMD, F, AMZN, F, AMZN, T, AAL, GME
Apple saw options trading volume of 1,334,420 contracts, call options account for 48%. Particularly high volume was seen for the $175 strike call option expiring this Friday, with 155,403 contracts trading on Thursday, representing approximately 15,540,300 underlying shares of AAPL.
Nvidia saw options trading volume of 524,470 contracts, call options account for 59%. Particularly high volume was seen for the $190 strike call option expiring this Friday, with 63,917 contracts trading on Thursday, representing approximately 6,391,700 underlying shares of NVDA.
Note: The option trade volume was converted to delta volume in order to calculate the equivalent buy/sell side stock share imbalance volume.
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