Today's Options Market Update

A selloff in semiconductor stocks deepened in early trading, dragging the Nasdaq lower to near correction territory, after reports Monday of a Chinese breakthrough in chip-making technology.

Earnings season picks up today. In the chips space, KLA (KLAC), Seagate Technology (STX), and NXP Semiconductors (NXPI) report after the close. The Federal Reserve also begins its two-day meeting amid increasingly hawkish rhetoric from some board members. The Fed is still expected to hold the policy rate unchanged tomorrow, but the recent jump in oil prices should help make it interesting. Consumer confidence data is due at 10 a.m. ET.

The major indexes opened sharply higher Monday and quickly retreated, with positive vibes from falling oil prices giving way to AI- and semiconductor-related jitters. The indexes finished mixed for the day, with the Nasdaq shedding 0.18%, the S&P 500 Index (SPX) ending little-changed, and the Dow Jones Industrial Average gaining 0.51%. Investors pummeled chip stocks yet again after news broke that a Chinese company was producing a key type of machinery used in making chips. Sandisk fell another 11% to rank as the worst S&P performer on the day.

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is lower by ~2 basis points to 4.614%.

The U.S. Dollar Index ($DXY) is lower by 0.09 to 101.44.

WTI Crude Oil (/CL) August futures are lower by 1.46% to $81.40/barrel.

Gold prices have traded in a range of $4,071.00-4,145.00 and were last seen trading lower by ~1.19% to $4,087.00/oz.

Natural Gas prices for August futures have traded in a range of $2.677-2.761 today and were last seen trading lower by 3.04% to $2.683.

Bitcoin (BTC) is lower by ~0.65% over the last 24 hours to $63,279.91 today.

Shares of Sherwin-Williams Co. (SHW + $23.98 to $351.25) are gapping up above the 200-day SMA this morning after the maker of paint, coatings and related products reported Q2 adjusted EPS of $3.70 ($0.18 beat) on Q2 revenue that increased 7.51% year-over-year (YoY) to $6.79B (above the $6.60B consensus estimate). Looking ahead, the company raised its full-year 2026 (FY26) EPS guidance to a range of $11.80-12.20 (from $11.50-11.90) and said that FY26 sales are forecasted to be up mid-to-high single digits. Calls are outnumbering puts ~3:2 with the September 18^th 390.00 call being the highest volume contract (volume is 107).

Also trading to the upside this morning is Coca-Cola Co. (KO + $5.51 to $89.58) after the beverage maker reported Q2 adjusted EPS of $0.97 ($0.04 beat) on Q2 revenue that increased 7.20% YoY to $13.40B (above the $13.162B expected). The company also raised guidance as FY26 adjusted EPS growth is now expected to be up 9-10% (from +8-9%) with FY26 organic revenue now expected to be up about 5% (vs. prior view of +4-5%). Calls are outnumbering puts better than 2:1 with the July 31^st 90.00 call seeing the most action from traders (volume is 7,679).

New 52-week highs (224 new highs today): Apple Inc. (AAPL + $2.96 to $339.87), General Dynamics Corp. (GD + $0.87 to $390.01), Johnson & Johnson (JNJ + $5.32 to $271.27)

Some unusual call activity (~27:1 calls over puts) is being seen in Tyson Foods Inc. (TSN + $1.19 to $61.90) which is primarily being driven by activity on the August 21^st 67.50 call. Volume on this contract is 3,112 versus open interest of 113, so we know that the volume primarily represents fresh positioning. The activity primarily consisted of various mid-sized blocks (459, 459, 400, etc.) that were bought around the same time at the ask price of $0.40 each, which suggests bullish intent. TSN is scheduled to report fiscal Q3 earnings on August ^3rd before the bell, so this positioning captures the potential impact of that event.

Shares of Corning Inc. (GLW - $24.70 to $118.66) are moving lower this morning after the glass and optical communications equipment maker beat quarterly estimates but issued lackluster guidance earlier this morning. GLW reported Q2 adjusted earnings of $0.78 per share ($0.02 beat) on Q2 revenue that increased 17.73% YoY to $4.738B (above the $4.608B expected). Looking ahead, the company guided Q3 adjusted EPS to a range of $0.85-0.89 (vs. the $0.85 consensus estimate) and Q3 sales to a range of $4.90-5.0B (vs. the $4.972B expected). Calls are outnumbering puts ~3:2 with the September 1^8th 140.00 call leading the way (volume is 12,488).

Also trading to the downside this morning is United Parcel Service Inc. (UPS - $5.20 to $107.75) even though the package delivery firm delivered a beat-and-raise quarter earlier this morning. UPS reported Q2 adjusted EPS of $1.76 ($0.10 beat) on Q2 revenue that rose 7.55% YoY to $22.80B (above the $21.809B expected). Looking ahead, the company sees FY26 adjusted EPS of $7.22 (above the $7.11 consensus estimate) and raised its FY26 sales guidance to $91.20B (from $89.70B and above the $90.29B FactSet consensus estimate). Calls are outpacing puts better than 2:1 with the August 21^st 120.00 call garnering the most attention from traders (volume is 1,361).

New 52-week lows (135 new lows today): MP Materials Corp. (MP - $2.58 to $40.55), Nano Nuclear Energy Inc. (NNE - $1.06 to $15.73), Oracle Corp. (ORCL - $2.32 to $117.58)

Some unusual put activity (~50:1 puts over calls) is being seen in Kodiak Gas Services Inc. (KGS - $1.10 to $56.64) which is primarily being driven by two large blocks (2,120 & 380) that were bought on the October 1^6th 52.50 put for $4.24 & $4.23 respectively when the bid/ask spread was $2.20 x $4.80 (open interest is 4). We know that these blocks are new positions based on the open interest figure, and we can assume that the intent is bearish in nature since the trades took place above the midpoint of the bid/ask spread.

Brookfield Infrastructure Corp. (BIPC + $1.06 to $41.95): Option volume is running at over 300x the daily average on this gas utility company as option traders primarily target the August 21^st 45.00 call. Volume on this contract is 2,495 versus open interest of 57, 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 $0.45-0.50 each, which suggests bullish intent.

Solventum Corp. (SOLV + $5.58 to $86.05): Option volume is running at ~155x the daily average on this healthcare equipment company which is primarily being driven by a 5,000 contract block that was bought on the January 2027 110.00 call for $2.40 when the bid/ask spread was $0.20 x $3.10 (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 bullish in nature since the trade took place above the midpoint of the bid/ask spread.

Woodside Energy Group Ltd. (WDS + $0.36 to $22.17): Option volume is running at ~27x the daily average on this oil & gas producer as option traders primarily target the August 21^st 25.00 call. Volume on this contract is 3,958 versus open interest of 170, 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 $0.15-0.25 each, which suggests bullish intent.

The Cboe Volatility Index (VIX - 0.57 to 18.10) has been on both sides of the unchanged line today (the intraday range is 17.88-19.52), as equity markets are mixed around the midday mark (DJI + 627, SPX + 26, $COMP - 2). VIX option volume has been light today at 281,826 contracts, and puts are outnumbering calls ~3:2 so far today.