The S&P 500 ended higher on Tuesday (Aug 27) and the Dow Jones notched a record-high close ahead of a much-anticipated quarterly report from Nvidia on Wednesday and economic data expected later in the week that could give clues about the path of interest rate cuts.
Regarding the options market, a total volume of 28,869,261 contracts was traded on Tuesday.
Top 10 Option Volumes
Top 10: NVDA; TSLA; AAPL; PDD; AMZN; AMD; SMCI; INTC; MARA; META
Source: Tiger Trade App
Traders in the U.S. equity options market are expecting Nvidia's upcoming earnings report to spark a more than $300 billion swing in the shares of the world's most dominant artificial intelligence chipmaker.
Options pricing shows that traders anticipate a move of around 9.8% in the company’s shares on Thursday, a day after it reports earnings, data from analytics firm ORATS showed. That's larger than the expected move ahead of any Nvidia report over the last three years and well above the stock's average post-earnings move of 8.1% over that same period, according to ORATS.
A total number of 2.35 million options related to Nvidia was traded, of which 62% were call options. A particularly high trading volume was seen for the $140 strike call option expiring this Friday, with a total number of 149,317 options contracts trading before earnings release.
Source: Market Chameleon
Shares of Super Micro were down 2.64% on Tuesday. Hindenburg Research disclosed a short position in Super Micro Computer and alleged "accounting manipulation" at the AI server maker, the latest by the short seller whose reports have rocked several high-profile companies.
Hindenburg said it found evidence of undisclosed related party transactions, failure to abide by export controls, among other issues, citing an investigation that included interviews with former senior employees and litigation records.
"It (Super Micro) benefited as an early mover but still faces significant accounting, governance and compliance issues and offers an inferior product and service now being eroded away by more credible competition," Hindenburg said in its report.
A total number of 223,122 options related to Super Micro was traded, of which 53% were put options. A particularly high trading volume was seen for the $500 strike put option expiring this Friday, with a total number of 11,078 options contracts trading as of Tuesday.
Source: Market Chameleon
Unusual Options Activity
Source: Market Chameleon
PDD Holdings' U.S.-listed shares dropped another 4.1% on Tuesday after plunging 28.5% on Monday. China's PDD Holdings missed market estimates for quarterly revenue on Monday, and downbeat comments from executives about China's domestic e-commerce competition and the firm's global outlook sent its shares down more than 28%.
However, Goldman Sachs analysts still feel optimistic about shares of PDD Holdings Inc. despite Temu owner’s disappointed sales in the second quarter and warning of growth sustainability.
A total number of 452,815 options related to PDD Holdings was traded, of which 57% were call options. A particularly high trading volume was seen for the $100 strike call option expiring this Friday, with a total number of 28,615 options contracts trading as of Tuesday.
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: ATUS; PATH; BILL; SMCI; IREN; CHWY; MU; LUMN; NFLX
Top 10 bearish stocks: WBA; NVDA; AMZN; PDD; AMD; SIRI; PARA; NU; RKLB; DOC
Source: Market Chameleon
Based on option delta volume, traders sold a net equivalent of -1,149,684 shares of WBA stock. The largest bearish delta came from selling calls.
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