Option Movers | Traders Flock to Sea As Its Stock Soars; US Yields Hit Multiyear Highs, Shaking Treasury ETF
Market Overview
Wall Street's main indexes posted gains on Monday (Sep. 25), with increases in Amazon.com shares and the energy sector, as Treasury yields rose further and investors looked to economic data and Federal Reserve policymakers' remarks later in the week for clarity on the path for interest rates.
Regarding the options market, a total volume of 29,859,910 contracts was traded, down 24% from the previous trading day.
Top 10 Option Volumes
Top 10: $SPY(SPY)$, $QQQ(QQQ)$, $TSLA(TSLA)$, $IWM(IWM)$, $NVDA(NVDA)$, $AAPL(AAPL)$, $VIX(VIX)$, $AMZN(AMZN)$, $TLT(TLT)$, $AMD(AMD)$
Source: Tiger Trade App
Options related to equity index ETFs are still popular with investors, with 7.65 million $SPDR S&P500 ETF Trust(SPY)$ (SPY) and 3.39 million $Invest QQQ Trust ETF(QQQ)$ (QQQ) options contracts trading on Monday.
US Treasuries extended their decline, driving 10- and 30-year yields to new multiyear highs, on expectations the Federal Reserve will hold interest rates high and the supply of new bonds will keep rising as the federal government contends with mounting deficits.
The largest long-dated bond ETF is suffering its biggest drawdown on record as the Federal Reserve’s higher-for-longer interest rates start to sting.
The $39 billion $iShares 20+ Year Treasury Bond ETF(TLT)$ (TLT) has lost 50% from its 2020 all-time high and is trading at its lowest point since 2011. At the same time, IHS Markit Ltd. data show that bets against the fund have risen, with short interest as a percentage of its shares outstanding at its highest in about a month.
There are 428.9K TLT option contracts traded on Monday, up 83% from the previous trading day. Call options account for 52% of overall option trades. Particularly high volume was seen for the $90 strike call option expiring September 29, with 14,149 contracts trading. TLT 20230929 90.0 CALL
Source: Market Chameleon
Most Active Equity Options
Special %Calls >70%: $Canopy Growth Corporation(CGC)$, $Sea Ltd(SE)$, $NIO Inc.(NIO)$
Data From CBOE Trader Alert, as of 25 September 2023 EDT
Unusual Options Activity
Source: Market Chameleon
Shares of Asian tech company $Sea Ltd(SE)$ surged 11.8% on Monday after new revelations regarding major competitor TikTok. In Indonesia, TikTok Shop is quickly taking over the e-commerce market. However, Indonesia may release regulations that would make it harder for a social media platform like TikTok to integrate e-commerce capabilities.
Sea has three major parts of its business, one of which is e-commerce with its Shopee platform. If growth for TikTok Shop is suddenly hampered by stricter regulations, it would be good for Shopee, in theory. And that's why Sea stock was up 12%.
There are 227.8K Sea option contracts traded on Monday, up 288% from the previous trading day. Call options account for 74% of overall option trades. Particularly high volume was seen for the $41 strike call option expiring September 29, with 15,960 contracts trading. SE 20230929 41.0 CALL
Source: Market Chameleon
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 -588,187 American Airlines shares of stock. The largest bearish delta came from selling calls. The largest delta volume came from the 20-Oct-23 14 Call, with traders getting short 227,686 deltas on the single option contract. AAL 20231020 14.0 CALL
Top 10 bullish stocks: $AMZN(AMZN)$, $GOOGL(GOOGL)$, $F(F)$, $GOOG(GOOG)$, $ORCL(ORCL)$, $XOM(XOM)$, $NKE(NKE)$, $VTRS(VTRS)$, $PANW(PANW)$, $KVUE(KVUE)$
Top 10 bearish stocks: $AAL(AAL)$, $T(T)$, $MS(MS)$, $DIS(DIS)$, $BA(BA)$, $INTC(INTC)$, $USB(USB)$, $BAC(BAC)$, $ATVI(ATVI)$; $WBD(WBD)$
Source: Market Chameleon
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