Unusual Options talks?(7.10) Meme's Feast Again!

July 12th is another day of celebration, as the US June CPI once again exceeded expectations, reducing the pressure for further interest rate hikes.

However, if we examine the specific components, the main factor behind the slowdown is the decline in energy and energy-related projects, while core inflation, such as rental services, remains relatively high.

This implies that the months of June and July may be a low point, and CPI is expected to rebound afterwards. Therefore, it is too early to rejoice and assume that there will definitely be no interest rate hikes.

The Federal Reserve has always been cautious in the market, so you should not take it lightly. However, the drop in the US dollar index to a one-year low has boosted the overall market. We can also see that the large-cap stocks that were struggling a few days ago have once again risen, with $Meta Platforms(META)$ and $NVIDIA Corp(NVDA)$ showing the strongest gains driven by market news.

As for unusual options activity, meme stocks or some small and medium-sized growth stocks that previously experienced significant declines and had high short interest ratios have once again attracted speculative capital.

Examples include $Carvana Co.(CVNA)$ which was heavily shorted and is trending towards a squeeze similar to what happened with GameStop (GME) before.

In terms of autonomous driving and automotive radar, $Innoviz Technologies Ltd.(INVZ)$ and $Luminar Technologies, Inc.(LAZR)$ with IV levels above 100 are excellent choices for covering positions amid volatility.

In the realm of cryptos, $Marathon Digital Holdings Inc(MARA)$ and $Riot Blockchain, Inc.(RIOT)$ have seen more PUT options, but due to the high volatility of digital currencies, sellers of PUT options generally only dare to make short-term bets, while long-term PUT options can also serve as a hedge.

Yesterday, $Recursion Pharmaceuticals, Inc.(RXRX)$ in which NVIDIA (NVDA) made an investment, also made it to the list of unusual movers. This relatively unknown company saw a one-day surge of 78%, targeting AI in drug development.

Additionally, $Activision Blizzard(ATVI)$ continues to generate attention. As I mentioned in "Microsoft's Acquisition of Blizzard Supported by Court, Potential Annualized Returns of 50%," it is highly likely to experience a decline on July 12th.

Although the FTC has suffered a defeat, it will continue to appeal, and the case is not yet 100% confirmed by the FTC, so we should not rejoice too early.

There were also large sell orders at the fair price of $89 yesterday, as the technology sector was surging and risk sentiment was rising. Such acquisition-related stocks tend to experience capital outflows, similar to the utilities sector. From the perspective of capital utilization, selling PUT options is still a more cost-effective approach.

Furthermore, there are continued occurrences of significant large orders near the intrinsic value for Meta Platforms (META) and NVIDIA (NVDA), which symbolize the prevailing risk sentiment.