0DTE Trading Surges on Fridays at Nvidia, Amazon.com, Tesla, Meta

May 25, 2023

Observations & Insight

EDITOR’S NOTE: Unfortunately, the story in JLN Options yesterday, “What Form of Magic Will Keep Citadel Happily Ensconced in Chicago,” was removed for some unknown reason by the site it was published on. If I see it again I will re-link it. ~JB


Cboe Global’s Howson on the exchange’s expansion in the Asia-Pacific and how it’s celebrating 50 years

JLN spoke at FIA Boca 2023 with David Howson, president of Cboe Global Markets, about the company’s most recent activities and how it would be celebrating 50 years in business.

Watch the video »

Lead Stories

0DTE Trading Surges on Fridays at Nvidia, Amazon.com, Tesla, Meta
Lu Wang – Bloomberg
An end-of-week feeding frenzy in options of the world’s biggest companies has emerged as two of the hottest trends on Wall Street collide.
Rampant demand for Big Tech exposure is combining with the boom in fast-expiring options to fuel an explosion in bullish bets in the first few minutes of Friday trading. That’s the day that weekly contracts on individual stocks like Apple Inc. and Microsoft Corp. expire, effectively turning them into the zero-day options that have become a trader obsession.

Nvidia’s Rally Triggers an Options-Market Frenzy
Gunjan Banerji – WSJ
Traders are rushing to the options market to bet big on Nvidia as the shares skyrocket: The most popular trade today is a call option tied to the shares jumping to $400 that expires tomorrow.

Vanguard: Brace for Volatility Over Debt Limit Negotiations
Lauren Foster – Barron’s
Investors should brace for more volatility in financial markets as lawmakers wrestle over the debt limit, but shouldn’t t worry the U.S. will default on its debt, according to Vanguard.
The second-largest asset manager—with 7.7 trillion in global assets under management—believes an agreement will be reached.

ILS/USD Shekel Volatility Bets Jump as Israeli Politics Unnerves Traders
Netty Idayu Ismail – Bloomberg
Volatility is creeping back into Israel’s markets on renewed concerns over Prime Minister Benjamin Netanyahu’s plan to weaken the judiciary and its potential impact on investment.
The nation’s currency is headed for its biggest weekly loss since February, when Netanyahu’s efforts to wrest more power away from Israel’s courts triggered mass protests and later prompted Moody’s Investors Service to lower the country’s credit outlook. Netanyahu plans to revive the judicial proposal after parliament passed on Wednesday a new national budget, a move that could bring some stability to his right-wing coalition.

The 2 Big Long-Term Risks Facing Markets and the Economy: Bank of America
Matthew Fox – Markets Insider
First-quarter earnings results are in, and they’re a lot better than Wall Street analysts expected.
Bank of America’s Ohsung Kwon said in a Thursday note that corporate America’s ability to quickly adapt to a volatile macro environment means investors shouldn’t be so negative on the economy given that earnings results beat estimates by 5% as companies begin to focus on productivity and efficiency gains.

Stock Market Outlook: 3 Headwinds That Could Derail US Equities
Zinya Salfiti – Markets Insider
The US stock market could get buffeted by headwinds in the coming weeks but any volatility will likely be short-term, according to BNY Mellon’s head of equities.
Alicia Levine told CNBC on Wednesday that equities are facing “a difficult environment” for three reasons: the apparent rift between the Federal Reserve and the market on where interest rates are headed, credit-related risks, and liquidity issues that may arise once the US debt-ceiling issue is resolved.

Fed Minutes: Officials Uncertain More Rate Hikes
Megan Cassella – Barron’s
Federal Reserve officials appear increasingly divided over the appropriate path forward for monetary policy, with participants acknowledging significant uncertainty at their May meeting and emphasizing a need to keep their options open as they debate whether to continue raising interest rates or holding them steady in the coming months.

Regulation & Enforcement

US action on short-sellers likely in ‘next few months’ -DOJ official
Chris Prentice – Reuters
Short-selling, the practice of seeking to profit off bets that a stock will fall, is a key focus for U.S. prosecutors, and there will be more activity by the Justice Department in coming months, a top department official said on Wednesday. The recent rout in shares of U.S. regional banks brought fresh scrutiny by criminal prosecutors and regulators of short sellers, who had previously come under review in the wake of the “meme stock” craze of 2021, Reuters and other media outlets have reported.


Tradeweb set to acquire Australian electronic trading platform Yieldbroker; The move will help bring increased liquidity, transparency and efficiency to Australian and New Zealand fixed income markets.
Wesley Bray – The Trade
Tradeweb Markets has entered into a definitive agreement to acquire Australia-based Yieldbroker, a government bond and interest rate derivatives trading platform covering the institutional, wholesale and primary markets. The transaction will leverage both firms’ trading solutions and industry experience to create more liquid, transparent and efficient fixed income markets.


Bitcoin Options Market Signals Weakness over 6 Months Amid Debt Ceiling Drama
Omkar Godbole – Yahoo Finance
Bitcoin’s (BTC) options market is showing bias for weakness over six months for the first time since early March as the U.S. debt ceiling drama continues.
The six-month call-put skew, which measures the difference between what investors are willing to pay for bullish calls and bearish puts expiring in 180 days, has declined to -1, the lowest since March 13, according to data from leading crypto options exchange Deribit, tracked by Amberdata.

Massive Skew To The Call Side
In #Vol411, Scott Bauer @cboesib touches on sizable $VIX #options trades, skew in $NVDA options and yesterday’s volume profile.


Generation Z’s favorite investment may be a cause for concern. Here’s why.
Aarthi Swaminathan – MarketWatch
Generation Z is getting smarter about their money, with some starting to invest even before they turn 18, according to a new report.
The survey by FINRA Investor Education Foundation and the CFA Institute, which defines Generation Z as those aged between 18 to 25, concluded that 6 in 10 owned at least some investments. Some 41% said they were investing in individual stocks, and 35% in mutual funds.

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