Market Overview
A robust, broad-based rally sent Wall Street to a sharply higher close on last Friday as encouraging economic data and a sunnier earnings outlook fueled investor risk appetite ahead of this week's much-anticipated two-day policy meeting of the Federal Reserve.
All major U.S. indexes ended the session up about 2.5% or more, with the S&P and the Nasdaq notching their second straight weekly gains. The blue-chip Dow posted its fourth consecutive Friday-to-Friday advance and its biggest weekly percentage gain since May.
Regarding the options market, a total volume of 47,442,174 contracts was traded on Friday, up 21% from the previous trading day. Amazon and Apple saw a surge in options trading after the earnings reports. The bullish sentiment of QQQ and Apple has heated up.
Top 10 Option Volumes
Top 10: SPY, AMZN, QQQ, AAPL, TSLA, META, IWM, EWZ, NVDA, HYG
Options related to equity index ETFs are popular with investors, with 9.32 million SPDR S&P500 ETF Trust and 3.21 million Invest QQQ Trust ETF options contracts trading on Friday.
Total trading volume for SPY and QQQ up 62% and 39%, respectively, from the previous day. 57% of SPY trades bet on bearish options.
After the earnings report, the trading volume of Amazon options surged to 3.73 million on Friday, more thantwice the previous trading day, of which 56% are PUT options.
Amazon.com Inc on lastThursday forecast a slowdown in sales growth for the holiday season, disappointing Wall Street and warning that inflation-wary consumers and businesses had less money to spend.
Amazon shares plunged nearly 12% at one timelast Friday, and then reduced losses to close 6.8% lower.
Unusual Options Activity
In addition to Amazon, the trading volume of Apple's options alsosurged to 3.14 million on last Friday after the release of the results, up 57% from the previous trading day. Particularly high volume was seen for the $157.5 strike call option expiring October 28, with 215,839 contracts trading on Friday.
Apple Inc on lastThursday reported revenue and profit that topped Wall Street targets, one of the few bright spots in a tech sector battered by spending cutbacks due to inflation.
The forecast for the holiday quarter was more grim. While not providing specific numbers, Apple said revenue growth would fall below 8% in the December quarter but did not go as far as Amazon.com.
Apple's stock soared 7.56% on Friday, and its market value soared by $176.1 billion, the largest single day increase since April 2020.
Chipmaker Intel Corp on Thursday cut its full-year profit and revenue forecast and warned it would lay off staff, but a stronger-than-expected performance at its personal computers segment helped send shares higher on Friday.
There are 504.8K Intel option contracts traded on Friday. Call options account for 64% of overall option trades. Particularly high volume was seen for the $29 strike call option expiring October 28, with 22,636 contracts trading on Friday.
In addition, the trading volume of Intel's call optionsfor the $37.5 strike call option expiring January 19, 2024 is relatively large, reaching15,589, which means that Intel's shares may increase by 29% in two years.
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: QQQ, APPL, BP, EWZ, PBR, MSFT, SOFI, LAZR, SPY, MPW
Top 10 bearish stocks: TSLA, FEZ, UVXY, F, IWM, SNAP, PFE, HYG, AAL, USEY
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