Market Overview
The S&P 500 and the Nasdaq managed to eke out tiny gains on Thursday (Nov. 16) while the Dow Industrial Average ended slightly lower with pressure from tech and retail bellwethers Cisco and Walmart after disappointing forecasts.
Regarding the options market, a total volume of 38,586,969 contracts was traded, down 15% from the previous trading day.
Top 10 Option Volumes
Top 10: SPY, QQQ, TSLA, IWM, AAPL, NVDA, INTC, MSFT, AMZN, BABA
Options related to equity index ETFs are still popular with investors, with 6.99 million SPDR S&P500 ETF Trust (SPY) and 3.12 million Invest QQQ Trust ETF (QQQ) options contracts trading on Thursday.
Intel shares jumped nearly 7% on Thursday, hitting their highest level in 17 months, after Mizuho Securities upgraded its rating on the semiconductor maker's stock to "buy," citing prospects of increased revenue from forthcoming chips and new production facilities.
There are 846.2K Intel option contracts traded on Thursday, up 162% from the previous trading day. Call options account for 64% of overall option trades. Particularly high volume was seen for the $43 strike call option expiring November 17, with 44,676 contracts trading. INTC 20231117 43.0 CALL
Chinese internet giant Alibaba on Thursday called off plans to spin off its cloud services business, citing U.S. restrictions on chip exports. Alibaba stock tumbled 9.1% on the news, which overshadowed an earnings report that topped estimates. Moreover, Chinese billionaire Jack Ma's family trust is set to sell 10 million American Depository Shares of Alibaba, for about $871 million, the ecommerce company said in regulatory filings. The sale will be done on Nov. 21 by JSP Investment and JC Properties, funds that are part of the family trust.
There are 642.9K Alibaba option contracts traded on Thursday, up 41% from the previous trading day. Call options account for 69% of overall option trades. Particularly high volume was seen for the $80 strike call option expiring November 17, with 29,729 contracts trading. BABA 20231117 80.0 CALL
Unusual Options Activity
Microsoft shares rose 1.8% on Thursday, hitting an all-time peak. The company announced Wednesday an AI accelerator chip to support its Azure OpenAI platform. It also introduced a general purpose Cobalt chip that uses Arm (ARM) architecture. Wedbush increased its Microsoft price target to $425 a share, representing potential upside of 15%.
There are 718.2K Microsoft option contracts traded on Thursday, up 93% from the previous trading day. Call options account for 67% of overall option trades. Particularly high volume was seen for the $375 strike call option expiring November 17, with 72,894 contracts trading. MSFT 20231117 375.0 CALL
Cisco shares tumbled almost 10% on Thursday, marking the worst day since May 19, 2022 when the stock slipped 13.7%. The fall comes a day after the company reported its quarterly earnings that beat on the top and bottom lines but gave weaker-than-expected revenue guidance for the fiscal second quarter. It also reduced its full-year revenue forecast.
There are 436.1K Cisco option contracts traded on Thursday, up 133% from the previous trading day. Call options account for 53% of overall option trades. Particularly high volume was seen for the $45 strike put option expiring January 19, 2024, with 23,863 contracts trading. CSCO 20240119 45.0 PUT
Wal-Mart on Thursday topped Wall Street’s fiscal third-quarter earnings estimates as sales rose, but the big-box retailer struck a cautious tone with its outlook after it saw consumer spending weaken at the end of the period. The company’s shares slid more than 8% on Thursday after they touched an all-time high the previous day.
There are 351K Walmart option contracts traded on Thursday, up 130% from the previous trading day. Call options account for 58% of overall option trades. Particularly high volume was seen for the $155 strike put option expiring November 17, with 23,646 contracts trading. WMT 20231117 155.0 PUT
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 -2,569,236 shares of Tesla stock. The largest bearish delta came from selling calls. The largest delta volume came from the 17-Nov-23 235 Put, with traders getting long 3,739,486 deltas on the single option contract. TSLA 20231117 235.0 PUT
Top 10 bullish stocks: AMD, NCLH, CSCO, DIS, AAL, GOOGL, SO, PANW, FCX, ZION
Top 10 bearish stocks: TSLA, INTC, AAPL, WMT, AMZN, MSFT, PFE, BAC, RTX; TGT
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