Option Movers | Emerging Markets Are Favored; Pinduoduo and Xpeng See Unusual Trading Activities
Market Overview
The S&P 500 ended down on Tuesday (Nov. 29), with losses in Apple and Amazon ahead of an upcoming speech by U.S. Federal Reserve Chair Jerome Powell that could provide hints about magnitude of future interest rate hikes. The S&P 500 declined 0.16% to end the session at 3,957.60 points. The Nasdaq declined 0.59% to 10,983.78 points, while Dow Jones Industrial Average rose 0.01% to 33,852.13 points.
Regarding the options market, a total volume of 28,350,276 contracts was traded on Tuesday, down 6% from the previous trading day. The trading of big tech stock options remained active. And the trading volume of options related to ETFs in emerging markets and China increased. Pinduoduo and Xpeng saw unusual options trading activities before and after earnings.
Top 10 Option Volumes
Top 10: SPY, QQQ, TSLA, AAPL, AMZN, EEM, IWM, FXI, TQQQ, VIX
Options related to equity index ETFs are popular with investors, with 6.72 million $SPDR S&P500 ETF Trust(SPY)$ and 2.05 million $Invest QQQ Trust ETF(QQQ)$ options contracts trading on Tuesday.
Total trading volume for SPY and QQQ both reduced about 1%, from the previous day. 56% of SPY trades bet on bearish options.
Source: Tiger Trade App
Big tech stocks continued to fall on Tuesday, with Apple and Tesla down over 2% and % respectively. As usual, options trading in these stocks remained active.
Elon Musk's ongoing Twitter drama has been a drag for Tesla's stock price, and it could expose the electric vehicle maker to further risks, Morgan Stanley said in a note on Monday. There are 1.49 million Tesla option contracts traded on Tuesday. Call options account for 56% of overall option trades. Particularly high volume was seen for the $185 strike call option expiring December 2, with 95,740 contracts trading. In addition, the trading volume of Tesla put options with a strike price of $180 on December 2 was also large, reaching 90,633 contracts.
It is noteworthy that the volatility of chinese stocks is very large recently, and the related ETF options trading has also increased significantly.
There are 324.7K $iShares China Large-Cap ETF(FXI)$ option contracts traded on Tuesday. Call options account for 66% of overall option trades. Particularly high volume was seen for the $29 strike call option expiring December 2, with 35,082 contracts trading. (The iShares China Large-Cap ETF seeks to track the investment results of an index composed of large-capitalization Chinese equities that trade on the Hong Kong Stock Exchange)
Unusual Options Activity
Source: Market Chameleon
$iShares MSCI Emerging Markets ETF(EEM)$ (EEM) saw unusual options activity on Tuesday. There are 435.4K EEM option contracts traded on Tuesday. Call options account for 61% of overall option trades. Particularly high volume was seen for the $39 strike call option expiring December 16, with 72,634 contracts trading.
Stocks, currencies and local bonds in developing nations rallied this month by the most since March 2016, a period that heralded the biggest gains since the commodity boom of the early 2000s. That helped the benchmark gauge for emerging-market equities to surpass the S&P 500 Index by the most since the global financial crisis, while dollar-denominated bonds advanced the most since then.
Chinese e-commerce platform $Pinduoduo(PDD)$'s option trading continued to be active after making earnings. There are 148.9K Pinduoduo option contracts traded on Tuesday. Call options account for 61% of overall option trades. Particularly high volume was seen for the $80 strike call option expiring December 2, with 8,479 contracts trading.
Pinduoduo Inc beat Wall Street estimates for third-quarter revenue on Monday. Pinduoduo said its revenue jumped 65% to 35.50 billion yuan ($4.99 billion) in the quarter ended Sept. 30, surpassing estimates of 30.94 billion yuan, according to Refinitiv data.
Chinese electric-vehicle maker $XPeng(XPEV)$ also saw unusual options activity on Tuesday. There are 95.42K XPeng option contracts traded on Tuesday. Call options account for 54% of overall option trades. Particularly high volume was seen for the $7 strike put option expiring December 2, with 12,884 contracts trading.
XPeng is due to report third-quarter numbers before the market opens for trading on Wednesday. XPeng investors desperately need some good news. Earnings could provide a jolt. No matter what the company reports, investors should brace for volatility.
TOP Bullish & Bearish Single Stocks
This report shows stocks with the highest volume of bullish and bearish activity by option delta volume, which converts option volume to an equivalent stock volume (bought or sold).
If we take the total positive option delta volume and subtract the total negative option delta volume, we will get the net imbalance. If the net imbalance is positive, there is more bullish pressure. If the net is negative, there is more bearish pressure.
Top 10 bullish stocks: SPY, QQQ, FXI, ITUB, IMAX, BAC, CRIN, BILI, LI, KWEB
Top 10 bearish stocks: TSLA, MMAT, AMZN, NIO, HYG, APEN, EEN, ARKK, UVXY, AQN
Source: Market Chameleon
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$道琼斯(.DJI)$ $纳斯达克(.IXIC)$ $标普500(.SPX)$ $标普500ETF(SPY)$ $纳指100ETF(QQQ)$ $特斯拉(TSLA)$ $中国大盘股ETF-iShares(FXI)$ $新兴市场ETF-iShares MSCI(EEM)$ $小鹏汽车(XPEV)$ $拼多多(PDD)$Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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