Wall Street closed sharply lower on Wednesday (Dec 18), with the Dow falling over 1,100 points after the U.S. Federal Reserve delivered a rate cut as expected but signaled it will ease the pace of further cuts in the coming year.
Regarding the options market, a total volume of 59,642,488 contracts was traded on Wednesday.
Top 10 Option Volumes
Top 10: $NVDA(NVDA)$; $TSLA(TSLA)$; $VIX(VIX)$; $PLTR(PLTR)$; $AAPL(AAPL)$; $AMD(AMD)$; $MU(MU)$; $MSTR(MSTR)$; $SOUN(SOUN)$; $AMZN(AMZN)$
Source: Tiger Trade App
The Fed announced after a monetary policy meeting it decided to cut its policy rate by 25 basis points (BPs), or a quarter percentage point, to the range of 4.25%-4.50% on Wednesday. But the U.S. central bank also said it sees just 50 BPs of cuts next year, based on its December dot plot projection, namely only two 25-BP cuts in 2025, down from 100 BPs in cuts projected in September. The updated projections peg the federal funds rate or policy rate, at 3.9% by the end of next year and 3.4% by the close of 2026.
Nasdaq fell 3.6% on Wednesday, triggering options related to $Invesco QQQ(QQQ)$ surging around 1500% on Wednesday. Invesco QQQ is an exchange-traded fund based on the Nasdaq-100 index. The fund will, under most circumstances, consist of all stocks in the index. The index includes 100 of the largest domestic and international nonfinancial companies listed on the Nasdaq stock market based on market capitalization.
Source: Tiger Trade App
Unusual Options Activity
Source: Market Chameleon
$Tesla(TSLA)$ shares settled 8.3% lower to $440.13 on Wednesday, registering their worst day in more than two months. Tesla, as the top loser of tech giants, was among hard-hit stocks as the U.S. stock market suffered a bloodbath after the Federal Reserve raised concerns about higher-than-expected interest rate for the coming year 2025. The benchmark S&P 500 index closed nearly 3% lower, recording its biggest daily loss on Fed’s decision day since September 17, 2001.
A total number of 3.63 million options related to $Tesla(TSLA)$ was traded, of which 61% were call options. Market sentiment for Tesla turned bearish after recent decline. Based on option delta volume, traders sold a net equivalent of 192,840 shares of Tesla stock. Tesla's $440 strike put option expiring this Friday soared over 380% on Wednesday.
Source: Market Chameleon
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: $NVDA(NVDA)$; $PLTR(PLTR)$; $BA(BA)$; $MU(MU)$; $UBER(UBER)$; $SMCI(SMCI)$; $TPR(TPR)$; $IVZ(IVZ)$; $BAC(BAC)$; $VICI(VICI)$
Top 10 bearish stocks: $AMZN(AMZN)$; $AAPL(AAPL)$; $INTC(INTC)$; $GOOGL(GOOGL)$; $F(F)$; $MSFT(MSFT)$; $AMD(AMD)$; $PFE(PFE)$; $GOOG(GOOG)$; $WMT(WMT)$
Source: Market Chameleon
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