Today's Options Market Update

Investors awoke to heavy tech sector selling that took root in Asia overnight and spread to Wall Street. Memory chip stocks, including Micron (MU), plunged following steep losses in South Korean chip names. At first glance, this looks less like a broad macro panic and more like a crowded leadership group finally getting stress-tested after an extended run. It could also represent a reset after a strong AI- and memory-led advance. It's not necessarily the start of a full-market breakdown unless selling broadens.

Early weakness wasn't limited to memory names, though that's where it hit hardest. Most of big tech, including Apple (AAPL) and Nvidia (NVDA), dropped in what appeared to be "risk-off" trading. There was no clear instigator other than the South Korean weakness, and possibly trepidation ahead of Micron's earnings late tomorrow. Any disappointment with Micron's results could reinforce the waterfall dynamic, but a clean print could draw buyers back into the space. Elevated U.S. Treasury yields also could factor into the early softness.

Major indexes finished mixed Monday. The Nasdaq took some lumps from weakness in SpaceX (SPCX), Alphabet (GOOGL), and Meta Platforms (META), while the S&P 500 Index finished mildly lower and the Dow Jones Industrial Average climbed. Bank stocks might be in focus before Wednesday's expected announcement of the Federal Reserve's annual stress test results. Banks that pass the test often raise their dividends.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is lower by ~2 basis points to 4.487%.

The U.S. Dollar Index ($DXY) is higher by 0.35 to 101.37.

WTI Crude Oil (/CL) July futures are lower by 0.84% to $73.24/barrel.

Gold prices have traded in a range of $4,108.20-4,216.00 and were last seen trading lower by ~1.42% to $4,143.20/oz.

Natural Gas prices for May futures have traded in a range of $3.177-3.277 today and were last seen trading lower by 1.63% to $3.20.

Bitcoin (BTC) is lower by ~2.81% over the last 24 hours to $62,174.04 today.

Shares of International Business Machines Corp. (IBM + $13.15 to $265.37) are moving higher this morning after JPMorgan upgraded the IT conglomerate to “Overweight” from “Neutral” and increased their price target on the stock to $291.00 from $270.00. Analysts at JPMorgan cited greater confidence in the potential for acceleration in the company’s software business in the second half of 2026. Separately, President Trump signed two executive orders to help drive the development of “commercially relevant” quantum computers by 2028, which may be assisting the move higher in IBM (IBM builds superconducting quantum computers). Calls are outpacing puts ~11:1 with the July 17^th 300.00 call seeing the most action from traders (volume is 21,170).

Also trading to the upside this morning is Korn Ferry Inc. (KFY + $3.39 to $71.16) after the provider of organizational consulting services reported Q4 adjusted earnings of $1.40 per share ($0.02 beat) on Q4 revenue that increased 6.72% year-over-year (YoY) to $768.256M (above the $743.34M expected). Looking ahead, KFY expects Q1 GAAP EPS to come in a range of $1.32-1.38 (vs. the $1.33 consensus estimate) and Q1 fee revenue to come in a range of $725-745M. Calls and puts are trading roughly even with the July 17^th 60.00 put being the highest volume contract (volume is 30).

New 52-week highs (76 new highs today): Enova International Inc. (ENVA + $4.52 to $209.26), Synnex Corp. (SNX + $8.50 to $291.76), The Travelers Companies (TRV + $3.97 to $314.58)

Some unusual call activity (~70:1 calls over puts) is being seen in Americas Gold and Silver Corp. (USAS - $0.29 to $5.04) as option traders primarily target the August 17^th 6.00 call. Volume on this contract is 13,861 (versus open interest of 5,800), which included a 6,480 contract block that was bought at the ask price of $0.55. We know that this block is a new position based on the open interest figure, and we can assume that the intent is bullish in nature since the trade took place at the ask price.

Shares of Carnival Corp. (CCL - $1.80 to $28.40) are trading lower this morning after the cruise liner reported Q2 adjusted EPS of $0.41 (40.06 beat) on Q2 revenue that increased 6.72% YoY to $6.663B (below the $6.692B expected). Regarding guidance, the company said that Q3 adjusted EPS is expected to be about $1.35 (below the $1.42 analysts were expecting) and FY2026 EPS to be about $2.22 (just below the $2.23 consensus estimate). Calls are outnumbering puts ~2:1 with the June 2^nd 28.00 call being the highest volume contract (volume is 8,284).

Also trading to the downside this morning is Ross Stores Inc. (ROST - $4.61 to $232.36) after Wells Fargo downgraded the discount retailer to “Equal Weight” from “Overweight” while leaving their $245.00 price target unchanged, citing valuation. Calls and puts are trading roughly even with the July 17^th 227.50 put being the highest volume contract (volume is 99).

New 52-week lows (136 new lows today): AeroVironment Inc. (AVAV - $1.78 to $149.55), Domino’s Pizza Inc. (DPZ - $7.59 to $287.52), Palantir Technologies Inc. (PLTR - $1.18 to $118.32)

Some unusual put activity (~20:1 puts over calls) is being seen in Johnson Controls International PLC (JCI - $5.14 to $143.07) which is primarily being driven by a 4,020 contract block that was bought on the August 21^st 120.00 put for $1.36 when the bid/ask spread was $1.00 x $1.70 (open interest is 0). We know that this block is a new position based on the open interest figure, and we can assume that the intent is bearish in nature since the trade took place above the midpoint of the bid/ask spread.

Genco Shipping & Trading Ltd. (GNK - $0.82 to $36.01): Option volume is running at ~127x the daily average on this dry bulk cargo shipper which is primarily being driven by activity on the August 21^st 30.00 call. Volume on this contract is 7,490 versus open interest of 508, so we know that the volume primarily represents fresh positioning. The bulk of the transactions consisted of various-sized blocks that were bought at various times for between $0.10-0.20 each, which suggests bullish intent.

Backblaze Inc. (BLZE + $2.36 to $10.48): Option volume is running at ~77x the daily average on this cloud services provider as option traders primarily target the July 17^th 12.50 call. Volume on this contract is 6,348 versus open interest of 21, so it’s likely that nearly all the volume represents fresh positioning. The bulk of the transactions consisted of various-sized blocks that were bought at various times for between $0.20-0.70 each, which suggests bullish intent. Shares of BLZE are trading ~30% higher today after the company announced a five-year $335M multi-exabyte data storage agreement with CoreWeave.

Varonis Systems Inc. (VRNS + $3.68 to $36.39): Option volume is running at ~49x the daily average on this software maker which is primarily being driven by activity on the July 17^th 45.00 call. Volume on this contract is 9,866 versus open interest of 0, so we know that all the volume represents fresh positioning (assuming no day trades). The bulk of the transactions consisted of various-sized blocks that were bought at various times for between $0.40-1.20 each, which suggests bullish intent. 

The Cboe Volatility Index (VIX + 1.84 to 19.12) has been in positive territory all day today (the intraday range is 18.97-20.54), as equity markets are mixed around the midday mark (DJI + 70, SPX - 75, $COMP - 391). VIX option volume is above average today at 427,232 contracts, and calls are outpacing puts ~3:1 so far today.