Market Overview
The S&P 500 climbed to its fourth straight record high close on Wednesday (Jan. 24), as Netflix surged following blowout quarterly results and a strong report from ASML fueled gains in chipmakers.
Regarding the options market, a total volume of 44,706,191 contracts was traded, up 34% from the previous trading day.
Top 10 Option Volumes
Top 10: SPY, QQQ, SPX, NVDA, TSLA, IWM, AMD, NFLX, TQQQ, AMZN
Options related to equity index ETFs are still popular with investors, with 9.73 million SPDR S&P500 ETF Trust (SPY) and 4.29 million Invest QQQ Trust ETF (QQQ) options contracts trading on Wednesday.
Netflix shares jumped 10.7% on Wednesday to a two-year high after strong subscriber growth cemented investor confidence the firm has won the streaming wars with its password-sharing crackdown and a strong content slate.
There are 715K Netflix option contracts traded on Wednesday, up 120% from the previous trading day. Call options account for 58% of overall option trades. Particularly high volume was seen for the $560 strike call option expiring January 26, with 30,361 contracts trading. NFLX 20240126 560.0 CALL
The Nasdaq touched its highest since January 2022 on Wednesday and is now less than 4% below its record high close in November 2021. Nasdaq 100 gained for the fifth day. Nasdaq100 Bull 3X ETF (TQQQ, This ETF offers 3x daily long leverage to the NASDAQ-100 Index, making it a powerful tool for investors with a bullish short-term outlook for nonfinancial equities) received favor from investors.
There are 684.3K TQQQ option contracts traded on Wednesday, up 185% from the previous trading day. Call options account for 56% of overall option trades. Particularly high volume was seen for the $57 strike call option expiring January 26, with 158,694 contracts trading. TQQQ 20240126 57.0 CALL
Unusual Options Activity
The Philadelphia SE semiconductor index (SOX) rose 1.54% to a record high after upbeat results from manufacturing equipment maker ASML Holding pointed to a recovery in global chip demand.
Nvidia and Broadcom both jumped more than 2% and hit record highs. Traders exchanged over $34 billion worth of Nvidia shares, more than any other stock on Wall Street, according to LSEG data.
AMD stock jumped 5.9% on Wednesday as New Street’s Pierre Ferragu upgraded AMD’s stock to buy, while setting a $215 target price for late 2024.
There are 1.96 million Nvidia option contracts traded on Wednesday, up 201% from the previous trading day. Call options account for 60% of overall option trades. Particularly high volume was seen for the $620 strike call option expiring January 26, with 98,804 contracts trading. NVDA 20240126 620.0 CALL
There are 1.52 million AMD option contracts traded on Wednesday, up 136% from the previous trading day. Call options account for 62% of overall option trades. Particularly high volume was seen for the $180 strike call option expiring January 26, with 132,427 contracts trading. AMD 20240126 180.0 CALL
The semiconductor stock boom has also sparked a frenzy of betting on Semiconductor Bull 3X Shares (SOXL, This ETF offers 3x daily long leverage to the PHLX Semiconductor Index, making it a powerful tool for investors with a bullish short-term outlook for semiconductor equities.).
There are 293.1K SOXL option contracts traded on Wednesday, up 86% from the previous trading day. Call options account for 74% of overall option trades. Particularly high volume was seen for the $36.5 strike call option expiring January 26, with 34,329 contracts trading. SOXL 20240126 36.5 CALL
TOP 10 Bullish & Bearish S&P 500
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.
Based on option delta volume, traders sold a net equivalent of -2,990,453 shares of Apple stock. The largest bearish delta came from selling calls. The largest delta volume came from the 26-Jan-24 197.5 Call, with traders getting short 1,961,398 deltas on the single option contract. AAPL 20240126 197.5 CALL
Top 10 bullish stocks: NFLX, PFE, AMD, PARA, IBM, UAL, FCX, HPQ, DD, LVS
Top 10 bearish stocks: AAPL, AMZN, MSFT, TSLA, C, F, AAL, GOOGL, DIS; T
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