U.S. stock futures are hovering around even this morning. After yesterday’s 300-point plus drop, it seems the Dow Jones Industrial Average may not be done falling just yet. Wall Street was clearly more shaken than many initially thought by the ramped up trade war rhetoric from U.S. President Donald Trump.

In fact, the president’s threats against America’s trading partners and China send the Dow Jones to a daily close below its 200-day moving average for the first time in a year.

Heading into the open, markets are still unstable. At last check, futures on the Dow are down 0.02% and S&P 500 futures have risen 0.05%. However, Nasdaq-100 futures have edged 0.19% higher in premarket trading.

In options activity, volume hit its highest levels in more than a week. Overall, about 21.7 million calls and 21.8 million puts changed hands yesterday. On the CBOE, the single-session equity put/call volume rose to 0.61. The 10-day moving average also rose, ticking higher to 0.56.

Options traders focused their attention on tech stocks yesterday, especially those with deep ties to China. Apple (NASDAQ:AAPL) volume was split between puts and calls, and even new AirPods couldn’t lift the shares. Advanced Micro Devices (NASDAQ:AMD) was another casualty of the selloff, dropping despite a Bank of America price-target hike.

Finally, Chinese giant Alibaba (NYSE:BABA) was heavily tripped up by Trump’s trade war, but ratings firm Argus reminded investors to not bail yet.

Let’s take a closer look:

Apple Inc. (AAPL)

I opined on Friday that Apple needed a new revolutionary product to justify a $1 trillion valuation. What we got yesterday were new AirPods.

The company is reportedly planning water-proof AirPods, a new HomePod and studio-quality over-ear headphones for 2019. For a company that brought us revolutionary products like the mouse, the iPod and the iPhone, the news seems rather lackluster.

Options traders agreed, splitting their attention on AAPL stock amid yesterday’s broad market plunge. Volume rose to 457,000 contracts, with calls and puts dividing the activity between them.

Apple’s July put/call open interest ratio also continued to rise. The front-month ratio came in at 0.76, up sharply from last Monday’s reading of 0.67. Sentiment is clearly beginning to shift on AAPL stock, and it’s not for the better.

Alibaba (BABA)

When I read the headlines yesterday morning, I knew it was going to be a rough day for Alibaba stock. President Trump’s pledge to limit investments in U.S. companies by Chinese firms was sure to negatively impact BABA stock’s sentiment outlook.

However, ratings firm Argus reminded investors that Alibaba has made most of its gains without the U.S. market. “Although Alibaba has also become a global brand and now operates internationally, the bulk of gross merchandise volume (GMV), revenue and profit is recognized in China,” Argus told clients. The firm reiterated its “buy” rating and $275 price target for BABA stock.

Options volume reflected this optimism. Volume came in at 384,000 contracts yesterday, with calls claiming 67% of the day’s take. Furthemore, the short-term July put/call OI ratio has remained relatively calm at 0.76. In fact, this reading is down from recent highs near 0.89 just weeks ago, pointing toward rising optimism for the shares.

Advanced Micro Devices (AMD)

Selling on tech stocks was hot and heavy yesterday, even for high-flier AMD stock. The company has received a boost lately after Intel’s (NASDAQ:INTC) CEO resigned, leaving the company short on leadership. Bank of America noted this and AMD’s tremendous potential with EPYC server chips when it reiterated its “buy” rating and raised its price target from $17 to $20.

AMD options traders were less enthusiastic, but still mostly bullish yesterday. Volume on the shares climbed to over 372,000 contracts, with calls snatching 58% of the day’s take. That said, bullish sentiment has soared on AMD in the past week.

It’s July put/call OI ratio has plummeted to just 0.31 from last Tuesday’s reading of 1.49. That’s an impressive swing, and proof that options traders are extremely bullish on AMD’s short-term prospects.

As of this writing, Joseph Hargett held no positions on any of the aforementioned securities.

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