Market Overview
Wall Street ended lower on Tuesday(Dec 6), with the S&P 500 extending its losing streak to four sessions, as skittish investors fretted over Federal Reserve rate hikes and further talk of a looming recession. The Dow Jones fell 1.03%, the S&P 500 lost 1.44% and the Nasdaq dropped 2%.
Regarding the options market, a total volume of 38,080,945 contracts was traded on Tuesday, up 3% from the previous trading day.
Top 10 Option Volumes
Top 10: SPY, QQQ, TSLA, IWM, AAPL, AMZN, META, BAC, XLE, VIX
Options related to equity index ETFs are popular with investors, with 10.23 million SPDR S&P500 ETF Trust (SPY) and 3.1 millionInvest QQQ Trust ETF (QQQ) options contracts trading on Tuesday.
Total trading volume for SPY and QQQ increased by 17% and 10%, respectively, from the previous day. 55% of SPY trades bet on bearish options.
$Meta Platforms(META)$ Inc dragged down markets, with its shares sliding 6.8% following reports that European Union regulators have ruled the company should not require users to agree to personalized ads based on their digital activity.
There are 544.3K Meta option contracts traded on Tuesday. Put options account for 54% of overall option trades. Particularly high volume was seen for the $115 strike put option expiring December 9, with 31,955 contracts trading.
Jitters on the direction of global growth have also weighed on oil prices, with U.S. crude slipping to levels last seen in January, before Russia's invasion of Ukraine disrupted supply markets. The energy sector fell 2.7% on Tuesday.
There are 435.2K XLE option contracts traded on Tuesday. Put options account for 67% of overall option trades. Particularly high volume was seen for the $90 strike call option expiring December 9, with 40,118 contracts trading.
Unusual Options Activity
Banks are among the most sensitive stocks to an economic downturn, as they potentially face negative effects from bad loans or slowing loan growth. The S&P banks index slipped 1.4% to its lowest close since Oct. 21.
There are 477.7K BAC option contracts traded on Tuesday. Put options account for 50% of overall option trades. Particularly high volume was seen for the $34 strike call option expiring December 9, with 16,323 contracts trading.
There are 90.8K USO option contracts traded on Tuesday. Call options account for 68% of overall option trades. Particularly high volume was seen for the $72 strike call option expiring Jan 20, with 10,857 contracts trading.
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: IWM, SBUX, XLE, QQQ, XLF, CVNA, LAZR, VFC, SQQQ, CGC
Top 10 bearish stocks: AAPL, AMZN, TLT, NIO, SPY, SOFI, CS, TSLA, MSOS, XPEV
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