To The Moon

Market Overview

Wall Street closed sharply higher on Tuesday (Mar. 21st) as widespread fears over liquidity in the banking sector abated and market participants eyed the Federal Reserve, which is expected to conclude its two-day policy meeting on Wednesday with a 25 basis-point hike to its policy rate.

Regarding the options market, a total volume of 36,256,323 contracts was traded, up 4% from the previous trading day.

Top 10 Option Volumes

Top 10: $SPY(SPY)$; $QQQ(QQQ)$; $Tesla(TSLA)$; VIX(VIX)$; Apple(AAPL)$; $IWM(IWM)$; $Nvidia(NVDA)$; $Amazon(AMZN)$; $Alphabet(GOOGL)$; $First Republic(FRC)$

Source: Tiger Trade APP

Options related to equity index ETFs are still popular with investors, with 7.79 million $SPDR S&P500 ETF Trust(SPY)$ and 2.83 million $Invest QQQ Trust ETF(QQQ)$ options contracts trading on Tuesday.

$Tesla(TSLA)$ shares surged 7.82% to $197.58 on Tuesday, marking its biggest closing gain in more than three months.

Tesla insurance registrations in China grew for the fourth straight week. Tesla had 18,712 insurance registrations for the week of March 13 to 19, up 10% from the 17,032 in the prior week. The global EV giant had 12,478 Model Y registrations last week and 6,623 Model 3 registrations. Tesla saw its Model 3 numbers increase nearly 10% last week after shooting up 83% two weeks ago. Registrations provide a measure of new car sales in China.

Source: Tiger Trade APP

Besides, Moody's Investors Service upgraded $Tesla(TSLA)$'s credit rating by one notch to Baa3, giving it investment-grade status from a prior junk rating.

Moody's wrote that the EV giant's outlook is stable and that it expects free cash flow of more than $7 billion and limited debt through 2025.

A total number of 2.29 million Tesla options was traded on Tuesday, up nearly 70% from the previous trading day. Call options accounted for 57% of total options trades. Tesla $200 call option expiring this Friday was the most popular option chain, with 194,152 contracts trading on Tuesday.

Most Active Options

1. Most Active Trading Equities Options:

Special %Calls >70%: $Alibaba(BABA)$; $Ford(F)$

Data From CBOE Trader Alert, as of 21 Mar 2023 EDT

Alibaba gained 3.33% to $83.7 on Tuesday. About 187K $Alibaba(BABA)$ options were traded, of which call options accounted for 80.1%. A particularly high volume was seen for the $90 strike call option expiring March 24, with 11,834 contracts trading on Tuesday.

J.P. Morgan announced the debut of its JPMorgan Active China ETF (JCHI), which the brokerage said was designed to be a portfolio of "best ideas" for investing in Chinese companies. According to J.P. Morgan, $Alibaba(BABA)$, which makes up 3.5% of the ETF's holdings, is No. 3 in terms of the fund's holdings.

2. Most Active Trading ETFs Options

Special %Calls >80%: $Nasdaq 100 Bear 3X ETF(SQQQ)$

Data From CBOE Trader Alert, as of 21 Mar 2023 EDT

As of Tuesday afternoon, markets were pricing in about 80% odds that the Fed will raise rates by a quarter point, to a range of 4.75% to 5%, the highest since 2007 on the eve of the global financial crisis.

Expectations for rate hikes among investors and economists have declined over the last two weeks, amid the collapse of three US regional banks and the takeover of Switzerland’s Credit Suisse Group AG.Until the bank turmoil erupted, officials were expected to continue — or even potentially step up — their yearlong campaign to raise interest rates and dampen rising prices.

Special %Puts >70%: $iShares iBoxx $ High Yield Corporate Bond ETF(HYG)$

Data From CBOE Trader Alert, as of 21 Mar 2023 EDT

Unusual Options Activity

Source: Market Chameleon

Regional bank $First Republic Bank(FRC)$ surged 29.5% to $15.77 on Tuesday. A total number of 492K million options was traded, of which put options accounted for 54%. A particularly high volume was seen for the $10 strike put option expiring this Friday, with 35,165 contracts trading on Tuesday.

JPMorgan Chase & Co. Chief Executive Jamie Dimon is leading discussions with the chief executives of other big banks about fresh efforts to stabilize troubled First Republic Bank. The discussions, while preliminary, have focused on how the industry could arrange for an investment that would boost the bank’s capital, according to people familiar with the matter. Among the options on the table, the people said, is an investment in First Republic by the banks themselves.

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: TSLA, GOOGL, AMZN, AAPL, FRC, AAL, MARA, AMC,

Top 10 bearish stocks: CS, PLTR, USX, BAC, GOOG, BKKT, CCL, AG, SQ, CSCO

Source: Market Chameleon

Wednesday's Watchlist

$GameStop Corp.(GME)$ stock jumped 40% in premarket trading Wednesday after the specialty retailer reported a surprise quarterly profit and sales that were above Wall Street expectations.

The retailer is “aggressively focused on year-over-year profitability improvement while still pursuing pragmatic long-term growth,” Chief Executive Matt Furlong said at the company’s call after the results.

GameStop earned $48.2 million, or 16 cents a share, in the fourth quarter, contrasting with a loss of $147.5 million, or 49 cents a share, in the year-ago quarter.

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