U.S. stock futures are trading broadly lower this morning, as traders retreat from all-time highs amid a wash of poorly received quarterly reports. Headlining this morning’s goose eggs are Chipotle Mexican Grill, Inc. (NYSE:CMG) and Advanced Micro Devices, Inc. (NASDAQ:AMD), with both providing significant drag for the S&P 500 Index.

Heading into the open, futures on the Dow Jones Industrial Average are down 0.08%, S&P 500 futures have fallen 0.16% and Nasdaq-100 futures have shed 0.17%.

On the options front, volume continued to retreat from Friday’s highs, but still remained well above average. Overall, about 16.2 million calls and 13.1 million puts changed hands. On the CBOE, the single-session equity put/call volume ratio dipped to 0.63, while the 10-day moving average ticked higher to 0.66.

Drilling down on Tuesday’s options activity, Advanced Micro Devices options traders were caught flat footed ahead of last night’s quarterly report. Given this morning’s selloff, smart money was on the put side. Meanwhile, Sprint Corp (NYSE:S) is laying the groundwork with T-Mobile US Inc (NASDAQ:TMUS) for a potential merger deal, while Caterpillar Inc. (NYSE:CAT) put up blockbuster earnings results.

Advanced Micro Devices, Inc. (AMD)

Advanced Micro Devices had a great quarter. Earnings rose to 10 cents per share, beating the consensus for 8 cents, while revenue soared 25.7% to $1.64 billion — also ahead of expectations for $1.51 billion. Guidance, however, was a different matter. The company forecast its first revenue decline in seven quarters and said that it expects cryptocurrency demand to level off.

Traders are taking the news hard, and AMD stock is down nearly 10% premarket.

Options traders were not quite prepared for the plunge. Volume neared 329,000 contracts, with calls making up 59% of the day’s take. Looking out to November, we see even more optimism, with the put/call open interest ratio resting at 0.66, with calls firmly in command. I would expect this ratio to shift sharply higher now as puts roll in following AMD’s poor guidance.

Sprint Corp (S)

According to a report on Reuters, merger talks are advancing between Sprint and T-Mobile, the No. 3 and No. 4 wireless providers in the U.S. Sources say that the companies are laying the groundwork for special committees of their board of directors to decide on a merger. These committees are important for the respective boards, as not doing due diligence could leave the companies open to lawsuits from minority shareholders.

Both Sprint and T-Mobile have declined to comment on a potential merger.

But that hasn’t stopped options traders from speculating, especially with S stock. Volume on Tuesday soared to 169,000 contracts, coming in at more than six times Sprint’s daily average. Calls made up a whopping 92% of the day’s take, as traders speculate heavily on a looming merger deal.

This optimism has even spilled over into the November options series, where Sprint’s put/call OI ratio has fallen to a perch at 0.44, with calls more than doubling puts among front-month options.

Caterpillar Inc. (CAT)

As I noted last month, Caterpillar’s boom is just getting started. Driven by strong domestic demand and robust sales in China, Caterpillar reported stronger-than-expected third-quarter results and lifted its guidance for the full year.

For the quarter, Caterpillar said it earned $1.95 per share, blowing past Wall Street’s target of $1.27 per share. Revenue rose to $11.41 billion, ahead of estimates for $10.65 billion.

Looking ahead, Caterpillar now sees 2017 sales of $44 billion, up from prior guidance for $42 billion to $44 billion, with earnings of $6.25 per share, an increase from $5.

CAT calls flooded the Street on Tuesday. Volume topped 133,000 contracts, more than quintupling the stock’s daily average, while calls gobbled up 62% of the day’s take. As for November, the put/call OI ratio is surprisingly bearish, coming in at 2.31.

Given Caterpillar’s strong performance and guidance, I would expect quite a few of these bears to shift in anticipation of additional gains for CAT stock.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.