By Eli, Linear
Yesterday sweepers were mixed and as expected stimulus talk plus the earnings positioning dominated the tape.
Price action was random with individual names like $Snap Inc(SNAP.US)$ & $Netflix Inc(NFLX.US)$ both up and down off earnings results, these high fliers finally rolled over major indices ETF protective put sentiments.
Why institutional sweepers have been long for months without wavering until recently?
Earnings have looked better each and every quarter, and even a load of cyclical, transportation and commodity plays really turning things around, on top of that, we now have inevitable fiscal stimulus coming, it’s only a matter of when. Besides, we have the Fed fully engaged here, licking their chops to do more, and lastly a vaccine announcement waiting in the timeline.
For now, institutional players positioned long for everything and the one thing we really need to keep an eye on tough is where money may flow if there is some turbulence in the indices and high fliers. If we learned anything about this rally that started back in March, is the indices can move in one direction while some groups can move in the opposite.
In other words, does gold move higher? Is there money to be made on the upside in some pockets of commodity sectors? What do rates and the dollar do? We don’t want to be close-minded here, just both prudent and conservative. These are the type of questions we need to find answers to, especially off of post-earnings flow.
Options with increasing option implied volatility:
BIIB SPWR CMG JKS PDD AMZN TIF UVXY VIX NOK UTZ INO GEO NTGR TGT
Options with decreasing option implied volatility:
GSX SNAP HTZ FSLY FIT CRON TECK SIRI
Options expected to have increasing volume:
TSLA CMG T SNAP PTON
Increasing unusual call option volume:
FLEX JKS WGO TRV AMCX STLD HLT
Increasing unusual put option volume:
FEZ ERIC CXO JKS TAN APO
Notable bettings toward broader market indices ETF on 10/21
Market-wide option volume of 25.9m contracts was 7% below recent average levels, with calls leading puts 13 to 9. Index products and single stocks saw relatively heavy volume, while ETF flow was moderate.
Individuals breakdown by sectors (10/21 notable bets)
Most active sectors included Telecommunications, Oil & Gas and Technology while Basic Materials and Utilities were relatively light. Of the 3,607 stocks with listed options, 1,274 (35%) closed higher, and 2,096 (58%) lower. Among the 500 most liquid single stocks, 30day implied volatility was lower for 229 and higher for 227.
Tech
Industrial
Consumer Cyclical
Financial
Communication Services
Healthcare
Energy
Basic Materials
Consumer Defensive
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