The S&P 500 gained nearly 2% following the election, prompting options traders to sell volatility and drive the Cboe Volatility Index down roughly four points to below 17. Meanwhile, energy equities tumbled 5.6% alongside crude oil dropping below $90, which generated heavy put-buying in the sector's main ETF. Bullish bets stood out elsewhere, as Rocket Companies experienced a surge in call buying alongside a 9% jump in solar stocks.
Key points
Post-election market sentiment sparked a massive volatility crush as the Cboe Volatility…: Post-election market sentiment sparked a massive volatility crush as the Cboe Volatility Index dropped below the 17 level.
Traders showed strong bullish conviction in select lending and solar names while rotating…: Traders showed strong bullish conviction in select lending and solar names while rotating heavily out of semiconductor equities.
Energy sector options reflected rising downside hedging, driven by crude oil weakness and…: Energy sector options reflected rising downside hedging, driven by crude oil weakness and heavy put-contract accumulation.
Sources checked by our analysis pipeline: 1
For more options-trading reaction to the rally, click the link at the top of the page for Options Action LIVE featuring CNBC contributors Michael Khouw and Brent Kochuba alongside host Oliver Renick.
Stocks are surging after midterms brought a Democratic blue wave and options traders are responding by selling volatility and embracing a rotation away from big-tech trades.
The S&P 500 added just shy of 2% by midday Wednesday, recovering losses from Friday and Monday. The move in its corresponding options prices was even bigger, with the Cboe Volatility index falling about four points to below 17, the biggest one-day drop in the volatility gauge since at least July.
Crude oil prices fell as WTI traded below $90 and energy stocks dropped 5.6% for the biggest decline in the S&P 500. Options on the State Street Energy Select Sector SPDR ETF (XLE) jumped to more than three times the 30-day average, with 57% puts by volume and the big-money trades concentrated in bearish put-buyers. The top trade in XLE was the 62.5-strike put expiring Jan. 15, suggesting it could be…
Democratic victories across both chambers of Congress have cleared political ambiguity, prompting market analysts to project moderated inflation and broader economic stability. The political shift simultaneously sparked local resistance against rapid infrastructure expansion, penalizing specialized artificial intelligence infrastructure firms while reinforcing the market dominance of heavily capitalized tech incumbents.
Investors are reacting to sudden upward momentum in trading for the carrier. The market movement highlights renewed interest from market participants following latest company updates. Further details regarding the specific drivers behind the price action remain limited at this time.
Equity markets responded favorably to shifting commodity values as jet operators benefited from cheaper inputs. Fuel represents a major operating cost for the aviation sector, meaning sudden reductions provide an immediate lift to company fundamentals. Consequently, market participants rallied around carriers following the sharp pricing dip in petroleum benchmarks.