U.S. stock futures are inching higher this morning after a second straight trading session of strong selling into the close. Traders continue to search for Santa, but as of now his much talked about rally remains absent.
Heading into the open, futures on the Dow Jones Industrial Average are up 0.15% and S&P 500 futures are higher by 0.29%. Nasdaq-100 futures have added 0.6%.
In the options pits, call volume jumped yesterday as the morning up gap buoyed optimism. Specifically, about 18.2 million calls and 13.9 million puts changed hands on the session.
At the CBOE the single-session equity put/call volume ratio continued its descent, falling to 0.62 — a one-week low. Meanwhile, the 10-day moving average fell to a two-month low at 0.66.
Here were three stocks atop the most-actives list. Twitter (NYSE:TWTR) saw renewed options interest alongside a rousing breakout to five-month highs. Nvidia (NASDAQ:NVDA) is in the spotlight on news that Softback (OTCMKTS:SFTBY) plans to sell its stake. Finally, Qualcomm (NASDAQ:QCOM) is trying to find its footing after winning a legal victory in a Chinese court.
Let’s take a closer look:
Twitter (TWTR)
Twitter is making another appearance atop the leaderboard today. With Thursday’s 6% surge, its month-to-date gains increased to 17%, which officially makes it the strongest stock of the entire S&P 500 for December.
With news surrounding the blue bird absent, the price move can only be described as one driven by technicals. Ever since the July crash, TWTR stock has been languishing void of any momentum. But with it now back above the 200-day moving average, buyers are returning in droves.
If this breakout over $36 sticks, the stock has room all the way up to $42 until any significant resistance comes in.
On the options trading front, traders came after calls with a vengeance. Activity swelled to 236% of the average daily volume, with 179,134 total contracts traded. 72% of the trading came from call options alone.
Implied volatility held steady on the day at 53% which places it at the 39th percentile of its one-year range. Premiums are pricing in daily moves of $1.22 or 3.4%.
Nvidia (NVDA)
The beatdown in NVDA stock has been bloody. The latest negative news hampering the fallen angel came from Bloomberg and involved plans from Softbank to sell its large stake in the company. It’s important to note, however, they didn’t specify how many of their shares they’re planning to part with.
Nonetheles, given that Softbank owns some 4.4% of the company, their departure could continue to depress Nvidia’s share price which is already 49% from its highs.
On the options trading front, puts were the hot ticket. Total activity grew to 141% of the average daily volume, with 277,062 total contracts traded. Puts accounted for 69% of the day’s take.
Implied volatility slid to 54% placing it at the 52nd percentile of its one-year range. Premiums are pricing in daily moves of $5.07 or 3.4%.
Qualcomm (QCOM)
Qualcomm recently scored a legal victory against tech juggernaut Apple (NASDAQ:AAPL). A Chinese court banned the sale of certain iPhone models which Qualcomm contends violate its patents.
QCOM stock has had a volatile 2018. Though it has rallied off its recent lows, it remains down 10% year-to-date. Its price trend remains a mess submerged beneath both the 50-day and 200-day moving averages. Until it can climb back above both indicators, sellers maintain the upper hand.
On the options trading front, calls outpaced puts on the day. Activity grew to 149% of the average daily volume, with 80,540 total contracts traded. Calls contributed 67% of the total.
Implied volatility sunk on the day to 33% placing it at the 43rd percentile of its one-year range. Premiums are pricing in daily moves of $1.21 or 2.1%.
As of this writing, Tyler Craig didn’t hold positions in any of the aforementioned securities. Want insightful education on how to trade? Check out his trading blog, Tales of a Technician.
