The Nasdaq-100 Index saw a decline of up to 1.8% following a report indicating that OpenAI's revenues were below expectations. This decline coincided with a notable increase in the put/call ratio for the Invesco QQQ Trust, reaching 1.49, the highest since late June, indicating that traders are preparing for a possible market pullback.
Despite the overall strength in big-tech stocks, the options market has shown a trend towards bearish sentiment, with significant trades reflecting both protective hedging and bullish bets. For instance, a $15 million sale of 740-strike puts and a purchase of 6,500 835-strike calls were notable trades, suggesting mixed sentiment among investors.
However, a substantial bearish bet was placed with the purchase of 15,000 680-strike puts for $16 million, indicating a strong expectation of a market downturn. Don Kaufman, a director at ThinkOrSwim, noted that while the market can experience drops, a sustained selloff would require significant selling pressure to shift the current market dynamics