Santa Rally Trades Favor Google as Rivian and Circle Cool Off
Against a backdrop of steadily cooling inflation and improving expectations for liquidity conditions, overall risk appetite in U.S. equities has rebounded, with technology, crypto-related, and new energy stocks showing notable gains.
As the Christmas holiday approaches, market attention has increasingly shifted toward the potential for a Santa Rally. However, options data suggest that institutional capital is far from indiscriminate in chasing the rally. Instead, investors continue to position for upside in $Alphabet(GOOG)$
Google: Short-Dated Calls Target the Santa Rally
Recently, the options market saw notable activity in GOOG call options expiring in early January 2026 with a $322.5 strike. The contract recorded a V/OI of around 30, with total premium traded approaching $1.07 million, despite having just over one week remaining until expiration. From both a maturity and pricing perspective, this does not represent a medium- to long-term bullish bet, but rather a targeted wager on an extremely short-term trading window.
At current price levels, the call remains out of the money, with relatively low delta but high sensitivity to near-term price movements. This suggests the trade is focused on year-end factors such as seasonal flows, index rebalancing, and the Santa Rally. Over the past week, market discussion around Alphabet has centered on progress in AI-powered search, the pace of cloud business expansion, and year-end fund flows into large-cap technology names. However, no new catalyst has emerged that would justify a medium-term re-rating of valuation. This helps explain why institutions opted for low-cost, short-dated calls rather than extending duration through longer-term positioning.
Overall, the trade represents a classic Santa Rally-driven call strategy, highly dependent on near-term momentum materializing.
Rivian: Profit Lock-In After the Rally, Limited Near-Term Upside
Rivian's options activity, by contrast, followed a sharp rebound in the stock price. The market observed call options expiring in September 2026 with a $23 strike trading at the bid, with total premium exceeding $2 million and a V/OI ratio as high as 60, pointing to active call selling.
It is important to note that this structure does not imply a bearish outlook. With a strike modestly above the current share price and a long-dated maturity, the trade is more consistent with institutions locking in volatility gains and managing medium-term expectations following the rally. This interpretation aligns well with recent fundamental developments. Several brokers have raised or reaffirmed positive ratings on Rivian, supported by clearer visibility around the R2 vehicle and the company’s autonomy narrative. That said, meaningful product ramp-up and earnings delivery remain concentrated beyond 2026.
With valuation having already recovered meaningfully and sentiment improving, institutions appear reluctant to add directional upside exposure, instead using call selling to signal that the medium-term story remains intact, but short-term gains may need to be digested.
Circle: After a Deep Pullback, Valuation Repair Will Take Time
Circle also saw notable options activity, with July 2026 calls at a $120 strike trading at the bid, involving roughly $1.17 million in premium and a V/OI ratio as high as 42, signaling active call selling rather than position unwinding. The stock had previously fallen below its IPO price, effectively clearing much of its early valuation premium and cooling market sentiment.
At a current share price of around $88, the contract remains deeply out of the money. The decision to sell calls rather than buy puts does not signal outright bearishness, but instead reflects a view that any rebound is likely to be gradual, with valuation normalization occurring through consolidation rather than a rapid recovery.
Fundamentally, Circle's position within the regulated stablecoin ecosystem remains intact. USDC continues to play a central role in compliant stablecoin infrastructure, with long-term relevance across payments, settlement, and on-chain finance. However, further clarity around monetization and regulatory pathways will take time, reinforcing the view that valuation repair is more likely to be incremental rather than abrupt.
Summary
In summary, while overall market risk appetite has improved, options market activity indicates that institutional investors are making differentiated choices across assets based on timing, realization cycles, and uncertainty profiles.
Alphabet's options flow is best viewed as a year-end trading opportunity, highly dependent on near-term momentum. Rivian's options behavior suggests that, despite improving medium-term fundamentals, the stock may enter a phase of expectation digestion with limited near-term upside. Meanwhile, following a deep correction, Circle's valuation recovery is likely to require patience, rather than aggressive positioning.
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