The Nasdaq ended more than 1% higher and the S&P 500 also rose on Monday (August 21st), with shares of Nvidia jumping as investors were optimistic ahead of its earnings this week, and other technology-related stocks gaining.
Regarding the options market, a total volume of 36,504,439 contracts was traded, down 15% from the previous trading day.
Top 10 Option Volumes
Top 10: SPY; QQQ; TSLA; AMC; JNJ; NVDA; AAPL; IWM; KVUE; VIX
Tesla's shares rose 7.33% on Monday, snapping a six-session losing streak, after brokerage Baird Equity Research added the stock to its "best ideas" list.
The brokerage said price cuts and their impact on margins will drive the narrative in the second half of the year but other potential catalysts for the stock include the launch of Cybertruck, wider adoption of Full Self-Driving and expansion into new markets.
Tesla's shares have risen about 88% so far this year on the back of growing sales despite a margin squeeze and hopes of wider adoption of its autonomous driving software.
A total number of 2.13 million options related to Tesla was traded, down 43% from the previous trading day. A particularly high trading volume was seen for the $230 strike call options expiring August 25th, with a total number of 140,116 option contracts trading on Monday.
Most Active Options
Most Active Trading Equities Options:
Special %Calls>70%: Petroleo Brasileiro; Palantir; PayPal; Nio
Unusual Options Activity
AMC stock is down by more than 23% on Monday. Earlier this month, Delaware’s Chancery Court gave AMC Entertainment the green light to proceed with a 1-for-10 reverse stock split and an increase in authorized shares. The split will likely go into effect on Aug. 24. Together, these two actions would allow for the conversion of all AMC Entertainment Preferred Equity Units into AMC stock.
A total number of 1,238,469 options related to AMC was traded. A particularly high trading volume was seen for the $3 strike put options expiring August 25, with a total number of 75,815 option contracts trading on Monday.
Cybersecurity firm Palo Alto Networks Inc. surged 14.8% after projecting stronger billings for the year than Wall Street anticipated, easing fears that a slowdown in demand may weigh on results. The company sees billings for the fiscal year ranging from $10.9 billion to $11 billion, compared with an average analyst estimate of $10.8 billion. Still, the firm’s quarterly and annual revenue outlooks came in below analysts’ estimates.
Palo Alto’s outlook is a potential bright spot for the cybersecurity industry. Companies such as Fortinet Inc. and Check Point Software Technologies Ltd. had been reporting earnings that pointed to a slowdown across the space, hurt by a broader pullback in tech spending and a shaky economy.
A total number of 203,520 options related to Palo Alto was traded. A particularly high trading volume was seen for the $250 strike call options expiring August 25, with a total number of 13,918 option contracts trading on Monday.
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; KVUE; DM; TSLA; PANW; DNN; HZNP; RIOT; MPW; COIN
Top 10 bearish stocks: AMC; PBR; NKLA; F; AAPL; NIO; VALE; PLTR; M; OSTK
Based on option delta volume, traders bought a net equivalent of 1,951,635 shares of Nvidia stock. The largest bullish delta came from buying 25-Aug-23 450 Call, with traders getting long 189,653 deltas on the single option contract.
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