To The Moon

U.S. March Consumer Price Index (CPI) data showed persistent inflationary pressures, and U.S. stocks opened lower and trended lower on Wednesday (April 10). The Philadelphia Semiconductor Index fell more than 1.6%, the worst performer. The 10-year U.S. Treasury yield closed at 4.559% on Wednesday, the highest closing level since November last year and the biggest single-day gain since September 2022. Investors are maintaining a cautiously optimistic attitude toward the overall stock market, remaining relatively optimistic about technology and growth stocks but more cautious about cyclical stocks such as banks. Markets are expected to maintain a range-bound trading pattern in the short term.

• SPY option composite trading data showed a slightly bullish bias, but a large number of put options were betting on a decline this week. Combination option trades projected that SPY would trade in the 500-490 range over the next 37 days, with a decline of no more than 4.8%.

• Call options on the triple-leveraged semiconductor ETF SOXL saw heavy buying, reflecting the market's optimism about the semiconductor sector.

• The market is cautious about the earnings prospects of the banking industry. For major banks about to report earnings, put option trading activity showed heavy buying of put options, particularly for Citigroup.

Details:

SPY option composite trading showed a slightly bullish bias, with open interest in call options rising further and open interest in put options still above the 52-week average level. Due to the stubbornly low open on inflation data, there was heavy buying of put options betting on a decline this week.

The most actively added call option was the $SPY 20240411 520.0 CALL$ , with a strike price of 520 and expiration on April 11, adding 10,000 contracts. The most actively added put option was the $SPY 20240411 505.0 PUT$ , with a strike price of 505 and expiration on April 11, adding 45,000 contracts.

The top one and three most actively added put options were the $SPY 20240411 505.0 PUT$  with buying from major players, projecting a 1.7% decline this week. Newly added combination options included selling the $SPY 20240517 490.0 PUT$  and buying the $SPY 20240517 487.0 PUT$ , as well as buying the $SPY 20240517 500.0 PUT$  and selling the $SPY 20240517 480.0 PUT$ , projecting that SPY will trade in the 500-490 range over the next 37 days, with a decline of no more than 4.8%.

The most actively added QQQ call option was the $QQQ 20240621 530.0 CALL$ , with a strike price of 530 and expiration on June 21, adding 20,000 contracts with buying from major players, expecting QQQ to rise 20% before June 21.

Option activity on the triple-leveraged semiconductor ETF Direxion Daily Semiconductor Bull 3X Shares (SOXL) showed heavy opening buying of the $SOXL 20240419 46.0 CALL$  and $SOXL 20240419 47.0 CALL$ , with volume exceeding 20,000 contracts each.

Citigroup will report earnings on the 12th. According to a survey by Morgan Stanley analysts on LSEG, Morgan Stanley's earnings per share reported on Friday could be down 4% from the same period last year. Citigroup and Wells Fargo (WFC) are expected to see earnings per share declines of 35% and 11%, respectively. Option activity detected heavy buying of the $C 20250919 60.0 PUT$  put option.