U.S. stock futures are trading broadly higher this morning after Wall Street took a breather yesterday. As for drivers, the Federal Reserve remains in focus today. Minneapolis Fed President Neel Kashkari will participate in a moderated question-and-answer session hosted by Cargill.
Heading into the open, Dow Jones Industrial Average futures are up 0.27%, S&P 500 futures have added 0.17% and Nasdaq-100 futures have risen 0.23%.
Turning to the options pits, Monday’s volume continued a streak of above-average activity. Overall, about 19.9 million calls and 13.6 million puts changed hands. The CBOE single-session equity put/call volume ratio rose to 0.63. The 10-day moving average ticked higher to 0.57.
Taking a closer look at Monday’s options activity, Facebook Inc (NASDAQ:FB) drew increased call volume following two bullish analyst notes. Nvidia Corporation (NASDAQ:NVDA) calls were heavy after the company announced key autonomous vehicle partnerships at CES in Las Vegas. Finally, Alibaba Group Holding Ltd (NYSE:BABA) is expanding its offering of Hema supermarket stores in Beijing.
Facebook Inc (FB)
FB stock attracted bullish attention on Monday after receiving a pair of bullish comments from the analyst community. BN Securities analyst Shebly Seyrafi named Facebook his top pick and reiterated the stock at outperform with a $210 target. Meanwhile, Credit Suisse lifted its target on FB stock to $232 from $230.
The shares gained less than 1%, but FB options traders piled into calls nonetheless. Volume hit 414,000 options contracts yesterday, more than doubling Facebook stock’s daily average. Calls snapped up 62% of the day’s take.
Looking at front-month options activity, FB’s January 2018 put/call open interest ratio rests at 0.71. Calls are firmly in command for the series, with peak call OI numbering 77,000 contracts at the in-the-money $170 strike. Peak put OI, meanwhile, totals 76,000 contracts and also resides at the $170 strike.
Nvidia Corporation (NVDA)
NVDA stock broke out to new highs on Monday after the company announced new partnerships in autonomous driving at CES in Las Vegas. Nvidia Chief Executive Jensen Huang announced deals with Volkswagen (OTCMKTS:VLKAY), Uber and Baidu, Inc. (NASDAQ:BIDU). The company is now working with more than 320 companies worldwide in the self-driving car and truck market.
The shares rallied more than 3% to hit a fresh all-time high just shy of $225 on Monday. NVDA options traders jumped at the opportunity, and sent more than 277,000 contracts across the tape. Calls dominated the session, accounting for 66% of the day’s take.
Despite the rising enthusiasm, NVDA’s January 2018 put/call OI ratio arrives at 1.20. In other words, NVDA options traders remain on guard for a potential short-term correction in the shares.
Alibaba Group Holding Ltd (BABA)
BABA stock also saw increased call option activity on Monday. The Chinese retailing giant announced plans to open 30 new Hema supermarket stores in Beijing by the end of the year.
In additional news this morning, Alibaba CEO Jack Ma said he would seriously “consider” listing BABA stock in Hong Kong. The news has given BABA stock added momentum in premarket trading.
Options traders loaded up on BABA calls yesterday. Volume rose to 272,000 contracts, with calls making up 67% of the day’s activity. That said, Alibaba stock currently sports a January 2018 put/call OI ratio of 1.02, with calls and puts in virtual parity. BABA stock needs to resume last year’s bull rally before these bears will finally give up on their positions.
As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.