Today's Options Market Update

Mulling strong results from Dell (DELL) and Palo Alto Networks (PANW), investors also nervously monitor yields and oil. Major indexes flattened early, still rattled by a jump to almost $90 per barrel for crude and a two-year high close for the 10-year yield after additional Middle East skirmishes.

New York Fed President John Williams told CNBC today that higher yields reflect economic strength, and he sees the trend of inflation slowly moving lower. Friday's August nonfarm payrolls report might blunt rate worries if it's soft. Analysts expect 45,000 new jobs. ADP August private sector employment of 38,000 missed the 47,000 consensus, but ADP doesn't typically correlate with the official government result.

Major indexes dipped Tuesday on war news that sent crude to five-week highs. Looking ahead, Broadcom (AVGO) earnings this afternoon could be a barometer for the chip industry and a possible gut check on Nvidia's (NVDA) recent solid results. A follow-up that mirrors Nvidia's progress might reinforce enthusiasm about AI demand growth.

The 10-year U.S. Treasury yield (TNX) is unchanged at 4.79%.

The U.S. Dollar Index ($DXY) is lower by 0.13 to 99.55.

The CBOE Volatility Index® (VIX) is down 5.81% today to 15.39.

WTI Crude Oil (/CL) Futures are higher by $0.73 to $90.95/barrel.

Ethereum (ETH) is down by 1.00% to $2,401.

Shares of Dell Technologies Inc. (DELL + $20.00 to $445.00) are up more than 4% today after the company raised its annual sales forecast by $25 billion, citing surging demand for servers that support artificial intelligence workloads. Dell now expects revenue for the fiscal year ending in January 2027 to be about $192 billion, including $74 billion from AI server sales, up from its May outlook of roughly $167 billion. The company also projected fiscal-year earnings of $25.50 per share, well above the average estimate of $19.10, and reported an AI server backlog of $95 billion at the end of the fiscal second quarter.

Dell also posted stronger-than-expected quarterly results, with sales jumping 58% to $47 billion. Profit, excluding certain items, was $7.04 per share, topping analysts' average estimates for adjusted earnings of $4.90 per share on revenue of $44.8 billion.

Shares of DELL touched an intraday high of $483.94 earlier this morning before paring much of those gains. Investors may also be weighing the stock's year-to-date performance, as shares have more than tripled already this year.

Option trading in DELL currently stands at 262,915 contracts, 12x average volume, with calls outpacing puts 2:1. The most active contracts are:

• September 4th, 2026, 500.00 call accounted for 15,106 contracts; open interest is 3,856 contracts.
• September 4th, 2026, 400.00 put accounted for 10,045 contracts; open interest is 7,364 contracts.
• September 4th, 2026, 450.00 call accounted for 7,341 contracts; open interest is 1,596 contracts.

New 52-week highs (91 new highs today): Gitlab Inc. (GTLB + $5.66 to $50.75), Johnson & Johnson (JNJ + $3.53 to $274.76), Omnilab Inc. (OABI + $0.94 to $5.38), Conocophillips (COP + $0.36 to $136.55)

Call activity is elevated in Cheniere Energy Co. (LNG + $1.96 to $296.09), with 15,507 calls traded—12x average volume and 45x put volume. Nearly all of the flow is concentrated in the September 18th, 2026, expiration, led by a large call vertical spread between the 300.00 and 320.00 strikes. Traders bought 4,000 of these $20.00-wide bull call spreads, representing 8,000 total contracts, through multiple block orders at an average price of $4.90 each, well above the midpoint of $4.23. Given collective open interest of 2,370 contracts, the activity appears to represent new positioning and suggests bullish intent. Shares of LNG have broken out to the upside recently, rallying nearly 25% over the past two months, and are trading just below their 52-week high of $300.89.

Call activity is also elevated in Compass Diversified (CODI + $0.02 to $11.44), with 8,268 calls traded—223x average volume. Nearly all of the flow is concentrated in the December 18th, 2026, 13.00 strike calls, where traders sold more than 7,515 contracts through three large blocks at prices ranging from $0.85 to $0.90 each, at or near the bid. With open interest of 4,858 contracts, the activity appears to represent either new positioning or additions to existing short-call positions, suggesting neutral-to-bearish intent. Shares of CODI have rallied sharply year-to-date, rising more than 230%, but have pulled back recently after setting a 52-week high of $13.25 on August 14th.

Shares of Palo Alto Networks Inc. (PANW - $29.09 to $333.00) are down more than 8% today, marking the stock's biggest drop in nearly seven months, despite the cybersecurity firm reporting better-than-expected fourth-quarter results. Adjusted EPS came in at $1.02, topping estimates of $0.98, while revenue of $3.41 billion also exceeded expectations for $3.35 billion. However, gross margin narrowed to 74.8% from 75.8% in the prior quarter.

The margin pressure, along with guidance pointing to slower fiscal 2027 growth in next-generation security products, appeared to overshadow the stronger profit outlook. Palo Alto expects fiscal 2027 revenue of $11.08 billion to $11.18 billion and adjusted profit of $4.16 to $4.19 per share, above Wall Street's average estimate of $4.11. Investors may also be taking some profits after a sharp rally, with PANW shares up nearly 150% year-to-date heading into last night's earnings report.

Analyst reaction remained constructive. RBC Capital raised its price target on the stock to $475 from $434, Deutsche Bank increased its target to $430 from $350, and DA Davidson lifted its target to $420 from $345.

Option trading in PANW currently stands at 71,106 contracts, 4x the average daily volume with calls and puts basically even. Leading the way are the following trades, expirations, and strikes:

• September 4th, 2026, 300.00 put accounted for 1,517 contracts; open interest is 2,699 contracts.
• September 4th, 2026, 320.00 put accounted for 1,511 contracts; open interest is 2,405 contracts.
• September 4th, 2026, 350.00 call accounted for 1,342 contracts; open interest is 209 contracts.

New 52-week lows (78 new lows today): Pacific Gas & Electric (PCG - $0.99 to $13.07), Nio Inc. (NIO - $0.18 to $3.88), Amrize Ltd. (AMRZ - $0.14 to $42.67), Xpeng Inc. (XPEV - $0.14 to $11.03)

Put activity is elevated in The Campbell's Co. (CPB + $0.16 to $23.87), with 12,261 puts traded—15x average volume and 8x call volume. Nearly all of the activity is tied to the September 4th, 2026, expiration, where more than 10,600 contracts have traded in the 22.50 strike puts. While trading has been two-sided, the largest block orders, including a 2,552-contract purchase at $0.30, have been on the buy side. With open interest of 5,419 contracts, the activity likely represents either new positioning or additions to existing long positions, suggesting bearish intent. Campbell's is scheduled to report earnings before the open on September 3rd, so traders may be positioning for earnings-related volatility. Shares of CPB are down roughly 14% year-to-date but have rallied nearly 20% since posting a 52-week low of $19.56 in late May.

Put activity is unusually elevated in Amphenol Corp. (APH - $2.89 to $160.28), with 8,148 puts traded—13x average volume and 10x call volume. Nearly all of the flow is concentrated in the October 16th, 2026, 135.00 strike puts, where traders sold 7,120 contracts in a single block at $1.45, slightly below the midpoint. With open interest of 3,970 contracts, the activity appears to represent either new positioning or additions to existing short-put positions, suggesting neutral-to-bullish intent. Shares of APH have rallied recently, rising nearly 15% since the company reported better-than-expected earnings on July 29th.

The Cboe Volatility Index (VIX - 0.95 to 15.39) is down 5.81% today, as equity markets are higher across the board (DJI + 230, SPX + 36, COMPX + 113). VIX movement has occurred within a wider range today (the intraday range is 15.33 to 16.82). The highest volume contract is currently the October 21st, 2026, 22.00 call (volume is 50,962 vs. open interest of 44,034).

Investors should consider carefully information contained in the prospectus, or if available, the summary prospectus, including investment objectives, risks, charges, and expenses. You can request a prospectus by calling 800-435-4000. Please read the prospectus carefully before investing.

Options carry a high level of risk and are not suitable for all investors. Certain requirements must be met to trade options through Schwab. Please read the Options Disclosure Document titled "Characteristics and Risks of Standardized Options." before considering any option transaction. Call Schwab at 1-800-435-4000 for a current copy. Supporting documentation for any claims or statistical information is available upon request.

Futures and futures options trading involves substantial risk and is not suitable for all investors. Please read the Risk Disclosure Statement for Futures and Options prior to trading futures products.

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness, or reliability cannot be guaranteed.

Investing involves risk including loss of principal.

All references to subjects (securities, indexes, futures contracts, and options contracts) were derived based on screens conducted by the writer for certain anomalous activity such as volumes, volatility and other related market data. As needed for brevity, the writer may have applied discretion when choosing among screen outputs for inclusion. Such discretion may have been based on news reports or other considerations of public interest. The views or opinions are those of the writer, and are subject to change without notice. All referenced subjects were chosen for illustrative purposes only and should not be considered recommendations, offers to sell, or solicitations of offers to purchase.

All corporate names and market data shown above are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security.

Past performance is no guarantee of future results.

This information provided here is for general informational purposes only, and is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, you should consult with a qualified tax advisor, CPA, Financial Planner, or Investment Manager.

Schwab does not recommend the use of technical analysis as a sole means of investment research.

Indexes are unmanaged, do not incur management fees, costs, and expenses and cannot be invested in directly. For more information on indexes please see schwab.com/indexdefinitions.

The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.