U.S. stock futures are broadly higher this morning. In fact, Dow Jones futures were up more than 200 points at last check. Driving bullish sentiment are hopes for President Donald Trump’s promised $200 billion infrastructure spending plan.
Trump’s plan rolls out some $200 billion over 10-years to improve highways, bridges, airports and other infrastructure. The Trump administration hopes the plan will inspire $1.5 trillion in new investment by local governments and private investors.
Against this backdrop, Dow futures are up 1.27%, S&P 500 futures have jumped 1.16% and Nasdaq-100 futures are higher by 1.12%.
Turning to the options pits, puts remained in control on Friday ahead of an uncertain weekend. Overall, about 26.2 million calls and 32.3 million puts changed hands on the session. The CBOE single-session equity put/call volume ratio spiked to 0.88 — a six-month high. The 10-day moving average also hit a six-month high, arriving at 0.69.
Taking a closer look at Friday’s options activity, Nvidia Corporation (NASDAQ:NVDA) calls were popular following another solid quarterly earnings report late on Thursday. Elsewhere, Amazon.com, Inc. (NASDAQ:AMZN) saw increased speculation after it began testing its own delivery service. Finally, Snap Inc (NYSE:SNAP) option bulls were not phased by the stock’s sharp reversal from post-earnings highs.
Nvidia Corporation (NVDA)
After the close on Thursday, Nvidia reported record fourth-quarter earnings. GPU sales exceeded expectations, while data centers and cryptocurrency miners provided a significant boost to the company’s bottom line. In fact, Nvidia stock was among the few to finish higher in Friday’s steep selloff.
Nvidia stock options traders took note of the stock’s strength. In a session dominated by puts, NVDA saw call volume soar to roughly 61% of the more than 415,000 contracts traded on Nvidia stock. That said, Nvidia’s February put/call open interest ratio ticked higher on Friday.
Arriving at 0.79 heading into earnings, the February put/call OI ratio rose to 0.80 on Friday. In other words, most of Friday’s call activity was likely related to profit taking. However, Nvidia stock is trading broadly higher once again this morning, and some of these bulls may regret bailing on their positions too early.
Amazon.com, Inc. (AMZN)
Amazon put some fear into FedEx Corporation (NYSE:FDX) and United Parcel Service, Inc. (NYSE:UPS) investors on Friday. The company reportedly began testing its own delivery service, “Shipping with Amazon,” in the Los Angeles region recently, according to sources.
That test could expand to other regions in short order. Analysts estimate it would cost Amazon $100 billion to build out a global delivery service on the scale of FedEx or UPS.
Options traders were mixed on the report, with investors likely eyeing the cost of a global shipping buildout. Volume came in at 291,000 contracts, with calls only grabbing 55% of the day’s take.
Overall, Amazon’s March options configuration is riding the fence in terms of sentiment. The March put/call OI ratio currently rests at 0.97, with puts and calls essentially in parity. I would expect to see this ratio rise, rather than fall, if Amazon confirms rollout plans for Shipping with Amazon.
Snap Inc (SNAP)
Last week, Snap stock fell nearly as quickly as it rose. The stock surged nearly 50% following a stronger-than-expected quarterly report on Wednesday. However, SNAP was unable to hold its perch near $21 and came crashing back down. The stock finished Friday at $18.80, an 11.7% decline from its post-earnings peak.
SNAP options traders were not deterred, however. Volume on Friday jumped to 267,000 contracts, with calls making up 63% of the day’s take. That said, there is still room for improvement. Snap stock’s March put/call OI ratio arrives at a middling reading of 0.73.
Snap stock is up more than 2% premarket, so expect more call volume to ride the shares higher today.
As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.