by Eli, Rachel
Hard to feel bearish off the order flow we saw last week. Institutional sweepers showed a solid appetite for risk on Friday getting aggressive call-side into early weakness. Reopening plays remain the primary target as familiar names such as $Boeing Co(BA.US)$, $General Motors Co(GM.US)$, $TripAdvisor Inc(TRIP.US)$ were lit up with call buyers all week again.
They also have shown an interest in a few individuals in recent days, and these names have both showed solid momentum and performance off the buying. $LENDINGCLUB CORP(LC.US)$ was the ticker of the day in that camp on Friday as institutions buying ran a blistering 35X normal flow. There have been no issues with the flow recently, it's just the better risk/reward entries that haven't been the most appealing for possible new swing positions.
Get ready because we have an action-packed week ahead, with the Fed meeting right smack in the middle of this week with March expiration. So expect the overall flow to be sloppy at times as players do some hedging and roll out expiring March positions. Even though the Fed is not expected to do anything, the market might have something to say about it. We already got a glimpse of it on Friday with rates pushing higher and it wouldn't shock us to see that continue up into the FOMC meeting on Wednesday as the markets try to make their point loud and clear to Mr. Powell. That may mean more volatility in the rate-sensitive groups like Tech, even though they sure looked a lot better on Friday. Additional volatility would actually be a good thing by keeping short tern sentiment in check.
Volatility maybe could give us another tactical buy signal set up again, but make no mistake about it, all the momentum has been in these reopening plays. So if you are looking for tactical trades, intraday or over the extremely short term, that's where the focus will be on "most" days. Obviously, that can change but there have been no signs of that coming from flow or price action. The short-term sentiment is a lot more favorable in these tech and growth sectors and that should generate opportunities off additional selling in these spots.
Notable bettings toward broader market indices ETF on 3/12
Market-wide option volume of 40.9m contracts was 5% below recent average levels, with calls leading puts 16 to 9. Single stock and Index products saw relatively heavy volume, while ETF flow was moderate.
Individuals breakdown by sectors (3/12 notable bets)
Most active sectors included Telecommunications, Industrials and Consumer Cyclicals while Energy and Health Care were relatively light. Of the 3,843 stocks with listed options, 2,360 (61%) closed higher, and 1,393 (36%) lower. Among the 500 most liquid single stocks, 30day implied volatility was lower for 238 and higher for 210. Unusual total option volume was observed in $Boeing Co(BA.US)$, $AT&T Inc(T.US)$, $Ford Motor Co(F.US)$, $General Motors Co(GM.US)$ and $United States Steel Corp(X.US)$.
Tech
Industrial
Consumer Cyclical
Financial
Communication Services
Healthcare
Energy
Real Estate
Basic materials
Consumer Defensive
Utilities
