U.S. stock futures are trading broadly higher this morning. China is once again a bullish driver for Wall Street. Trade relations between China and the U.S. continued to thaw over the weekend.
Ahead of the open, futures on the Dow Jones Industrial Average were up 0.29%. S&P 500 futures were last seen higher by 0.18% and Nasdaq-100 futures have gained 0.24%.
In options activity, volume was a touch light on Friday. Volume only came in at about 18.6 million calls and 16.1 million puts to end the week. On the CBOE, the single-session equity put/call volume ratio rebounded from six-month lows to hi 0.60 on Friday. The 10-day moving average held at 0.61, it’s lowest reading since March 15.
Cryptocurrency news drove heavy options activity on Facebook, Inc. (NASDAQ:FB) on Friday. Meanwhile, Advanced Micro Devices, Inc. (NASDAQ:AMD) was pressured after Nvidia Corporation (NASDAQ:NVDA) said it expected significantly less crypto revenue going forward.
Finally, Symantec Corporation (NASDAQ:SYMC) options volume surged after a whistleblower report said the company may need to restate earnings.
Let’s take a closer look:
Facebook Inc. (FB)
Last week I reported that Facebook Messenger head David Marcus would begin studying how to use blockchain in developing new products. That news snowballed into a report that Facebook was seriously considering launching its own cryptocurrency. It’s not the first time Facebook has explored offering a cryptocurrency, but the company now has a blockchain unit devoted to the task.
Facebook stock options traders pushed volume to more than 375,000 contracts on Friday following the news. What’s more, calls claimed 62% of the day’s take, pushing call activity back to average levels seen last year.
That said, some of Friday’s call activity was likely the liquidation of existing positions. Specifically, the June put/call open interest ratio rose from 0.70 on Thursday to today’s reading of 0.72. It was a minor tick higher in put OI, but still notable given the bullish news.
Advanced Micro Devices, Inc. (AMD)
Sticking with the crypto theme, Advanced Micro Devices shares fell nearly 1.5% on Friday in the wake of Nvidia’s quarterly earnings report. Nvidia posted solid quarterly results but noted that crypto mining made up a higher-than-expected portion of revenue. What’s more, Nvidia said it expected this demand to drop sharply in the coming quarterly.
While AMD reported less crypto revenue than Nvidia, the stock still took a turn lower on Friday. Options traders also appeared wary on the day. Volume rose to 193,000 contracts, but calls only made up 55% of the day’s take.
Looking out to June, the put/call OI ratio currently rests at a bearish reading of 0.89. This reading lies above 80% of all those taken in the past year, indicating negative sentiment on AMD despite the stock’s recent rebound.
Symantec Corporation (SYMC)
Symantec is in trouble. SYMC stock plunged more than 33% on Friday after the company reported that it’s board’s audit committee was investigating a whistleblower report that the company might have to restate results. Symantec said it could miss its 10-K filing deadline and might need to restate some financial results and/or revise guidance.
Options traders flooded the shares. Volume surged to 242,000 contracts, or more than 20 times SYMC’s daily average. Calls managed to claim 56% of the day’s take, though whether these were position closures or bets on a rebound is unclear at this point.
June options are far from optimistic, however. Currently, the June put/call OI ratio rests at 0.99, with puts and calls in near parity. What’s more, both the $22 and $21 June put strikes, each home to more than 11,000 contracts, are both trading firmly in the monthly. I would expect some liquidation here soon to lock in profits.
As of this writing, Joseph Hargett held no positions on any of the aforementioned securities.