![]() And now we're seeing it come back." Murphy said the action was muted Monday, but he said investors were now focused on Powell's 12:40 p.m. When momentum to the upside accelerates, this is just a new phenomena. "It was a little bit of a perfect storm with a couple of those different factors. "There was a ton of near-term call volume when the market was having all that positive momentum, pre- the NFP throwing cold water on it," Murphy said. An investor buying a call option makes a bet that the stock or ETF the option is on will rise, so investors in the one-day options were expecting an intraday pop. SPY 5D line spy Much of the volume was in zero-day to expiration options, which expire on the same day. But they also focused on the three big tech stocks that were reporting earnings after Thursday's bell – Apple, Alphabet and Amazon, according to Chris Murphy, co-head of derivatives strategy at Susquehanna International Group. Those options were big market bets, like in the SPDR S & P 500 ETF and Invesco QQQ Trust, which represents the Nasdaq 100. Stocks continued a two-day rally that day on Powell's dovish comments made during his Wednesday afternoon press briefing. According to Susquehanna, 40 million call options were traded last Thursday. "A contrary indicator?" he asked in a note, adding that the previous record amount of call buying activity was in January 2021 just as the meme stock frenzy peaked. ![]() ![]() But the record volume in call options on stocks last week may also be the sign of a medium-term peak in speculative behavior, according to Julian Emanuel, head of equity, derivatives and quantitative research at Evercore ISI. A speculative frenzy after Fed Chairman Jerome Powell spoke last week helped drive record trading in call options Thursday, and there could be more Powell-related options action Tuesday as investors await his midday speech. ![]()
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