U.S. stock futures are trading lower this morning as the S&P 500 continues to wrestle with potential resistance at the 200-day moving average.

Heading into the open, futures on the Dow Jones Industrial Average are down 0.56% and S&P 500 futures are lower by 0.61%. Nasdaq-100 futures have lost 0.59%.

In the options pits, call volume spiked sharply yesterday, helping to drive overall volume back to average levels. Specifically, about 19.1 million calls and 14.6 million puts changed hands on the session.

However, those calls didn’t translate over to the CBOE, where the single-session equity put/call volume ratio rose to 0.59 — a two-week high. The 10-day moving average held its ground in one-month low territory at 0.57.

Traders zeroed in on video games and marijuana yesterday. After missing earnings estimates by a mile, Electronic Arts (NASDAQ:EA) shares suffered their largest down day in a decade. Activision (NASDAQ:ATVI) suffered alongside EA and saw its price target lowered by MKM Partners. Cronos Group (NASDAQ:CRON) finally succumbed to gravity on an analyst downgrade. Let’s take a closer look:

Electronic Arts (EA)

The danger of holding stocks into earnings was on full display in Electronic Arts yesterday. After reporting disappointing holiday sales and lowering its forward guidance, the videogame maker suffered its largest one-day drop in over a decade. By day’s end, fleeing investors hacked 13.3% off of its share price.

EA earned 86 cents per share on revenue of $1.29 billion. Analysts were expecting earnings of $1.94 on $1.75 billion in sales.

On the options trading front, calls outpaced puts despite the day’s thrashing. Activity surged to 760% of the average daily volume, with 124,681 total contracts traded. Calls contributed 60% to the session’s total.

Ahead of earnings, the expected move based on option premiums was 7.1%. So, the 13.3% thrashing was an outlier bringing big gains to traders carrying long volatility strategies like straddle into the release. Given the post-earnings volatility crush, premiums are now pricing in daily moves of $2.03, or 2.5%.

Activision (ATVI)

The earnings miss in EA stock weighed on the entire videogame industry on Tuesday. Activision shares were slammed 11% amid worries that its upcoming report could be equally dismal.

Comments from MKM Partners analyst, Eric Handler, may have also added pressure to the selling. He lowered the firm’s price target for Activision to $48 from $68 citing “reduced financial visibility and limited capital appreciation potential” in the company for 2019.

Options activity swelled to 517% of the average daily volume, with 117,223 total contracts traded. Calls dominated the day, accounting for 70% of the take.

Implied volatility jumped to 62%, placing it at the 75th percentile of its one-year range. Premiums are now pricing in daily moves of $1.69, or 3.9%

Cronos Group (CRON)

The meteoric rise in Cronos Group finally fell prey to profit-taking yesterday. The downside reversal should be expected and viewed as healthy. Before this week’s retreat, bubbling optimism surrounding marijuana stocks had driven CRON stock’s year-to-date gains up as much as 141% — which is insanity for six weeks.

While the extreme overbought conditions would have justified the pullback by themselves, the selling pressure likely came in part because of a downgrade from GMP Securities. Analyst Martin Landry lowered the firm’s rating from buy to hold based on the lofty valuation levels.

On the options trading front, call and put popularity were balanced on the day. Activity climbed to 183% of the average daily volume, with 119,981 total contracts traded. 51% of the trading came from call options.

With the rocketship rise finally halted, implied volatility receded on Wednesday to 129%. It remains sky high, but the triple-digit level is likely justified given the massive daily moves we continue to see in CRON.

As of this writing, Tyler Craig didn’t hold a position in any of the aforementioned securities. Check out his recently released Bear Market Survival Guide to learn how to defend your portfolio against market volatility.