To The Moon

Market Overview

Wall Street gyrated to end sharply lower on Wednesday (Mar. 22nd) after the U.S. Federal Reserve delivered a widely expected 25 basis point policy hike, while hinting that it was on the verge of pausing future increases in view of recent turmoil in the financial sector.

Regarding the options market, a total volume of 40,216,462 contracts was traded, up 11% from the previous trading day.

Mega-cap growth shares fell while $NVIDIA(NVDA)$ was an exception. The stock showed the highest volume of bullish activity by option delta volume. $Coinbase(COIN)$ is also in focus as the stock dropped over 10% in premarket trading on Thursday after the crypto exchange disclosed an SEC warning.

Top 10 Option Volumes

Top 10: $SPY(SPY)$; $QQQ(QQQ)$; $Tesla(TSLA)$; $IWM(IWM)$; $Nvidia(NVDA)$; $Apple(AAPL)$; $VIX(VIX)$; $AMD(AMD)$; $Amazon(AMZN)$; $GameStop(GME)$

Source: Tiger Trade APP

Options related to equity index ETFs are still popular with investors, with 8.69 million $SPDR S&P500 ETF Trust(SPY)$ and 3.12 million $Invest QQQ Trust ETF(QQQ)$ options contracts trading on Wednesday.

$Tesla(TSLA)$ shares fell 3.25% to $191.15 on Wednesday. Elon Musk went even further in the dovish direction. Responding to Ackman's tweet, the Tesla boss said the "Fed needs to drop the rate by at least 50bps on Wednesday."

However, the U.S. Federal Reserve delivered a widely expected 25 basis point policy hike on Wednesday. Other mega-cap growth stocks, including $Amazon(AMZN)$, $Alphabet(GOOGL)$, $Meta(META)$ and $Apple(AAPL)$ all closed down as the market was disappointed when Powell clarified that their hands weren’t tied and that they can keep raising rates if they need to.

Most Active Options

1. Most Active Trading Equities Options:

Special %Calls >70%: $Marathon Digital(MARA)$; $SoFi Technologies(SOFI)$

Data From CBOE Trader Alert, as of 22 Mar 2023 EDT

Special %Puts >80%: $Luminar Technologies(LAZR)$

Data From CBOE Trader Alert, as of 22 Mar 2023 EDT

2. Most Active Trading ETFs Options

Special %Calls >80%: $Nasdaq 100 Bear 3X ETF(SQQQ)$; $SPDR Gold Shares(GLD)$; $VanEck Gold Miners ETF(GDX)$

Data From CBOE Trader Alert, as of 22 Mar 2023 EDT

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

Data From CBOE Trader Alert, as of 22 Mar 2023 EDT

Unusual Options Activity

Source: Market Chameleon

$Nvidia(NVDA)$’s stock closed up 1% Wednesday for its eighth consecutive positive session, with a gain of 15.3% over that time, making it the longest winning streak for Nvidia shares since July 2020, and the stock’s best eight-day winning streak since the eight days ended June 22, 2007, during which it gained 17.4%

A total number of 1.36 million options related to $Nvidia(NVDA)$ was traded, up about 77% from the previous trading day. A particularly high volume was seen for the $270 strike call option expiring this Friday, with 77,018 contracts trading on Wednesday.

Wall Street analysts reported Wednesday that Nvidia’s graphics-processing units are seeing widespread adoption by cloud-service providers as the company’s software offerings are creating a wider moat.

Shares of $First Republic Bank(FRC)$ were down 15.47% to $13.33 on Wednesday as the regional lender struggled to raise capital amid worries that it may need to downsize or seek government support.

Source: Tiger Trade APP

Major banks and private equity firms have so far balked at infusing capital on fear of losses on the bank's loan book and investment portfolio following a rapid rise in interest rates.

$GameStop Corp.(GME)$ stock soared 35% on Wednesday after the specialty retailer reported a surprise quarterly profit and sales that were above Wall Street expectations. GameStop's $25 and $30 strike call options expiring this Friday were the most popular option chains, with 42,273 and 32,390 contracts trading respectively on Wednesday.

Source: Market Chameleon

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.

$GameStop(GME)$ 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.

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: $NVDA(NVDA)$, $CS(CS)$, $GOOG(GOOG)$, $MULN(MULN)$, $UAL(UAL)$, $UBS(UBS)$, $DBRG(DBRG)$, $XPEV(XPEV)$, $EXEL(EXEL)$, $X(X)$

Top 10 bearish stocks: $TSLA(TSLA)$, $SI(SI)$, $LAZR(LAZR)$, $BAC(BAC)$, $INTC(INTC)$, $SOFI(SOFI)$, $SQ(SQ)$, $SNAP(SNAP)$, $MARA(MARA)$, $COIN(COIN)$

Source: Market Chameleon

Thursday's Watchlist

Shares of $Coinbase Global Inc.(COIN)$ dropped 10.85% in premarket trading Thursday after the crypto exchange disclosed a warning from regulators that it may have broken securities laws.

Based on discussions with the SEC, Coinbase said that the potential charges relate to the company’s spot market, its staking service Coinbase Earn, Coinbase Prime and Coinbase Wallet.

The company said that the investigation is “still at a very early stage,” and that it has turned in documents and provided two witnesses for testimony, “one on the basic aspects of our staking services and one on the basic operation of our trading platform.”

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