Today's Options Market Update

The high-flying chip sector reversed course early today after The Wall Street Journal reported that OpenAI missed key revenue and user targets. A long list of major chip stocks declined 3% or more, pinning the Nasdaq Composite amid sudden questions about the strength of AI demand.

Checking Middle East developments, there's no progress easing the conflict, Reuters reported, as President Trump appeared disappointed with Iran's latest proposal to open the Strait of Hormuz in return for an end to the U.S. blockade. Adding to bearish sentiment, the Bank of Japan (BoJ) sounded hawkish while keeping rates unchanged at its meeting today. Three policymakers voted for a hike and the BoJ lifted its inflation forecast. U.S. Treasury yields hit three-week highs this morning, which, combined with crude nearing $100 per barrel and volatility on the rise, painted a bearish picture for equities.

Major indexes mostly edged up Monday to new record highs for the S&P 500 and the Nasdaq Composite, though gains cooled from last week's blistering pace. Volume remained below average, an ongoing theme that raises questions about conviction behind the rally. Just three of 11 S&P 500 sectors started the week higher, and two were mega cap dominated tech and communication services. Discretionary stocks fell ahead of key earnings today from General Motors (GM), Starbucks (SBUX), Coca-Cola (KO), and United Parcel Services (UPS).

Source: Schwab Center for Financial Research

The 10-year U.S. Treasury yield (TNX) is higher by ~2 basis point to 4.359%.

The U.S. Dollar Index ($DXY) is higher by 0.19 to 98.686.

WTI Crude Oil (/CL) is higher by 3.60% to $99.84/barrel.

Gold prices have traded in a range of $4,567.60-4,716.50 and were last seen trading lower by ~2.47% to $4,578.00/oz.

Natural Gas prices for May futures have traded in a range of $2.483-2.578 today and were last seen trading higher by 0.98% to $2.575.

Bitcoin (BTC) is lower by ~1.71% over the last 24 hours to $76,049.93 today.

Shares of The Coca-Cola Co. (KO + $4.42 to $79.86) are gapping up to a seven-week high this morning after the soda maker reported Q1 adjusted EPS of $0.86 ($0.05 beat) on Q1 revenue that increased 12.61% year-over-year (YoY) to $12.50B (above the $12.241B expected). Looking ahead, the company raised its FY2026 EPS guidance to a range of $3.24-3.27 (from $3.21-3.24), which is slightly above the $3.23 FactSet consensus estimate. Calls are outnumbering puts better than 2:1 with the May 1^st 80.00 call leading the way (volume is 10.766).

Also trading to the upside this morning is S&P Global Inc. (SPGI + $10.19 to $447.41) after the data analytics provider reported Q1 adjusted EPS of $4.97 ($0.15 beat) on Q1 revenue that increased 10.43% YoY to $4.171B (above the $4.071B FactSet consensus estimate). SPGI affirmed its full-year 2026 adjusted EPS guidance of $19.40-19.65 (vs. the $19.60 consensus estimate) while slightly lowering FY26 sales guidance to $16.302-16.609B from $16.348-16.655B (vs. the $16.484B consensus estimate). Puts are outnumbering calls ~3:2 with the May 15^th 390.00 put being the highest volume contract (volume is 202).

New 52-week highs (103 new highs today): Applied Industrial Technologies Inc. (AIT + $2.55 to $300.65), Linde PLC (LIN + $2.58 to $513.33), Nucor Corp. (NUE + $6.94 to $221.94)

Some unusual call activity (~35:1 calls over puts) is being seen in precision oncology company Tango Therapeutics Inc. (TNGX - $1.71 to $24.62) which is primarily driven by a 2,980 contract block that was bought on the June 18^th 30.00 call at the ask price of $3.50 (open interest is 18). 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. TNGX is scheduled to report Q1 earnings on May 11th before the bell, so this positioning captures the potential impact of that event.

Shares of Spotify Technology SA (SPOT - $65.61 to $430.21) are under pressure this morning after the Swedish audio streamer reported Q1 EPS of $4.04 ($0.32 beat) on Q1 revenue that increased 20.47% YoY to $5.308B (below the $5.36B FactSet consensus estimate). Spotify’s monthly active users increased 12% YoY to 761M while premium subscribers increased 9% YoY to 293M. Calls are slightly outnumbering puts with the May 15^th 460.00 put being the highest volume contract (volume is 765).

Also trading to the downside this morning is Corning Inc. (GLW - $14.56 to $153.46) after the maker of glass, ceramics and advanced optical products reported Q1 earnings of $0.70 per diluted share ($0.01 beat) on Q1 revenue that increased ~20% YoY to $4.14B (below the $4.30B FactSet consensus estimate). Corning also issued mixed guidance as Q2 EPS is expected to come in a range of $0.73-0.77 (vs. the $0.75 FactSet consensus estimate) on Q2 revenue that is expected to be roughly $4.60B (below the $4.65B expected). Calls are outpacing puts better than 2:1 with the May 1^st 170.00 call leading the way (volume is 9,089).

New 52-week lows (59 new lows today): Boston Scientific Corp. (BSX - $0.90 to $59.05), Clorox Company (CLX + $0.71 to $97.37), Planet Fitness Inc. (PLNT - $0.36 to $66.21)

Some unusual put activity (~20:1 puts over calls) is being seen in PROCEPT BioRobotics Corp. (PRCT - $1.47 to $22.62) which is primarily driven by a 4,000 contract block that was bought on the May 15^th 20.00 put at the ask price of $0.65 (open interest is 95). 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 at the ask price. The bearish positioning appears to be an “earnings play” as PRCT is scheduled to report Q1 earnings tomorrow after the bell.

Loews Corporation (L + $1.93 to $113.10): Option volume is running at over 300x the daily average on this provider of commercial property and casual insurance as option traders primarily target the May 15^th 120.00 call. Volume on this contract is 3,658 versus open interest of 3, 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 $0.45-0.70 each, which suggests bullish intent.

GSK PLC (GSK + $0.26 to $54.48): Option volume is running at ~72x the daily average on this drug maker which is primarily being driven by some spread activity out on the May 15^th expiration earlier this morning:

• 56.00 call (open interest is 21): Two 6,000 contract blocks were bought at the same time for an average price of $1.255 (one for $1.25 and the other for $1.26) when the bid/ask spread was $1.10 x $1.30.
• 60.00 call (open interest is 1,352): A 12,000 contract block was simultaneously sold for $0.28 when the bid/ask spread was $0.25 x $0.35.

We know that all these blocks are new positions based on the respective open interest figures, and it appears that two $4.00-wide bull call spreads were established for a net debit of $0.975 (x 12K contracts x 100 multiplier, excluding commissions). The positioning suggests that the block trader believes that GSK will close above the break-even price of $56.975 at expiration. The bullish positioning appears to be an “earnings play” as GSK is scheduled to report Q1 earnings tomorrow before the market opens.

Xylem Inc. (XYL - $5.43 to $118.08): Option volume is running at ~27x the daily average on this maker of engineered products and solutions which is primarily being driven by a couple of large blocks that simultaneously traded on the May 15^th expiration earlier this morning:

• 125.00 call (open interest is 86): A 2,000 contract block was bought for $1.20 when the bid/ask spread was $0.55 x $1.30.
• 135.00 call (open interest is 130): A 2,000 contract block traded for $0.20 when the bid/ask spread was $0.00 x $0.35.

We know that both these blocks are new positions based on the respective open interest figures, and it appears that a $10.00-wide bull call spread was established for a net debit of $1.00 (x 2K contract x 100 multiplier, excluding commissions). The positioning suggests that the block trader believes that XYL will close above the break-even price of $126.00 at expiration. XYL is trading ~4% lower this morning after reporting Q1 earnings.

The Cboe Volatility Index (VIX + 0.60 to 18.62) has been in positive territory all day today (the intraday range is 18.20-19.43), as equity markets are mostly lower around the midday mark (DJI + 53, SPX - 52, $COMP - 331). VIX option volume is below average today at 252,172 contracts, and puts are slightly outnumbering calls so far today.