COSW Sells Away Costco's Upside Each Week to Fund Its Distributions - 24/7 Wall St. S&P 5006,636.90 +0.41% Dow Jones46,719.40 +0.51% Nasdaq 10024,327.20 +0.38% Russell 20002,548.92 +0.46% FTSE 10010,109.40 +0.93% Nikkei 22553,958.00 +1.09% Stock Market Live March 25, 2026: S&P 500 (SPY) Roller Coaster Ride Continues Investing COSW Sells Away Costco's Upside Each Week to Fund Its Distributions By John SeetooPublished Mar 25, 9:31AM EDT Quick Read Costco Wholesale (COST) posted $69.6B in quarterly revenue, up ...

Quick Read YieldMax BRK.B Option Income Strategy ETF (BRKC) paid $0.9975 per share in September 2025 but distributions collapsed to $0.10-$0.21 by early 2026 as implied volatility fell, while YieldMax MSFT Option Income Strategy ETF (MSFO) saw weekly payouts shrink from $0.5498 in May 2025 to $0.0532-$0.0818 by March 2026. Both funds use synthetic covered calls that cap upside gains when the underlying stock rallies, causing NAV erosion that compounds over time in rising markets. When implied volatilit ...

Group 1 - YieldMax XOM Option Income Strategy ETF (XOMO) has increased its share price by 21% year-to-date and has been providing weekly distributions in 2026, making it attractive for income-focused investors [2] - XOMO employs a synthetic covered call strategy on ExxonMobil stock, generating income by selling call options and collecting premiums, rather than distributing dividends from ExxonMobil [3][8] - The distribution amounts have varied significantly, with payments in 2024 ranging from $0.19 to $0.51 per share, and shifting to weekly payments in 2025 with amounts between $0.05 and $0.19 per share in early 2026, reflecting the underlying volatility [6][8] Group 2 - The income generated by XOMO is directly linked to market volatility, as options premiums are influenced by implied volatility; higher market uncertainty leads to increased premiums collected by XOMO [7][8] - The VIX index has risen from approximately 18 in early February to 27.3 by March 12, indicating elevated market anxiety, which supports stronger premium income for XOMO [7] - While ExxonMobil shares have appreciated by 49% over the past year due to rising crude oil prices, XOMO's capped structure limits shareholders' upside potential while facilitating premium collection [8]

Core Viewpoint - The pre-earnings options volume for Gossamer Bio (GOSS) is normal, with a notable preference for puts over calls at a ratio of 19:3, indicating bearish sentiment ahead of earnings release [1] Options Activity - The implied volatility suggests that the market is anticipating a significant price movement of approximately 46.1% following the earnings results [1] - The median price movement for Gossamer Bio over the past eight quarters has been 3.5%, indicating a historical context for expected volatility [1]

Core Viewpoint - Option traders are moderately bearish on Nike (NKE), with shares currently down $1.07 to approximately $54.63, indicating a cautious sentiment in the market [1] Options Activity - Options volume is roughly in line with the average, with 55,000 contracts traded, and calls leading puts, resulting in a put/call ratio of 0.52, which is lower than the typical level of around 0.71 [1] - Implied volatility (IV30) has increased by 0.8 points to approximately 50.3, placing it in the highest 10% of observations over the past year, suggesting an expected daily price movement of $1.73 [1] - The put-call skew has steepened, indicating a heightened demand for downside protection, particularly following an upgrade to Overweight by Barclays [1] Earnings Outlook - Nike (NKE) is scheduled to report earnings after the market close, with option markets pricing in a 50% probability of a price movement greater than 0.0% or $0.00 [1]

Group 1 - Option traders are moderately bearish on Warner Bros. Discovery (WBD), with shares currently down 16 cents near $27.80 [1] - Options volume is relatively light, with 3,639 contracts traded, and calls leading puts, resulting in a put/call ratio of 0.66, compared to a typical level of around 3.14 [1] - Implied volatility (IV30) has increased by 0.3 points to approximately 10.53, which is in the lowest 10% of observations over the past year, indicating an expected daily move of $0.18 [1] - The put-call skew has steepened, suggesting increased demand for downside protection among traders [1]

Group 1: Market Volatility and Trading Activity - Traders are increasingly engaging in options trading due to significant supply disruptions from the war in Iran, leading to soaring oil and commodity prices [1] - Implied volatility for oil has reached unprecedented levels, with record daily volume of over 8 million contracts reported by CME Group Inc. [1] - The volatility event is described as one of the largest in 20 years, with oil flows through the Strait of Hormuz nearly halted, causing West Texas Intermediate futures to jump 12% on Friday, marking the largest weekly gain ever [2] Group 2: Investor Sentiment and Positioning - The premium of call options versus put options reached the most bullish reading since 2015, indicating a shift in oil traders' positions as prices exceed $90 [3] - Investors are extending their bids for call options along the term structure, suggesting expectations of prolonged risks beyond a short-term flare-up [4] - The current market dynamics indicate that dealers are hesitant to take on risk, as the rate of volatility increase is outpacing the growth in open interest [3] Group 3: Impact on Natural Gas Market - The shipping halt due to the conflict has disrupted Middle East liquefied natural gas supply, negatively impacting the European natural gas market, which is still recovering from price spikes in 2022 following Russia's invasion of Ukraine [5]

Core Viewpoint - The latest Middle East conflict is perceived by traders as a temporary shock, leading to strategies that profit from a retreat in oil prices after an initial spike [1] Oil Market Dynamics - Oil options and futures indicate that traders are betting on a logistical crisis rather than a structural one, as evidenced by the significant increase in implied volatility for short-term Brent contracts [1] - The Brent futures curve shows a steep backwardation, with the spread between the front-month and six-month contracts widening to about $10, the highest since the Russia-Ukraine war in 2022, indicating tight near-term supply [1] Trading Behavior - The put-to-call ratio for West Texas Intermediate options dropped to 0.35, reflecting heavy bullish call buying, before rebounding to 0.56, indicating a shift in market sentiment towards downside protection [1] - Dealers are short a significant amount of deep out-of-the-money calls, creating a negative gamma profile in crude, contrasting with typical environments where dealers are long gamma [1] Open Interest Trends - Brent options open interest fell sharply from around 388,000 contracts on February 18 to approximately 73,000 by February 27, before surging to over 700,000 contracts on March 2, suggesting a significant unwinding of positions [1] - More than 40% of futures open interest is concentrated in April through July expiries, with thinner positioning further out the curve, indicating a focus on short-term trading strategies [1]

Core Viewpoint - TeraWulf (WULF) shares have experienced a notable increase, rising by $0.80 or 5.46%, reaching approximately $15.54, indicating positive market sentiment towards the company [1] Options Market Activity - The options volume for TeraWulf is relatively light, with 46,000 contracts traded, and calls are leading puts, resulting in a put/call ratio of 0.11, significantly lower than the typical level of around 0.52 [1] - Implied volatility (IV30) has decreased by 0.78, now at 100.82, which is below the 52-week median, suggesting an expected daily price movement of $0.99 [1] - The put-call skew has steepened, indicating an increased demand for downside protection among investors [1]

Core Insights - Barchart.com provides tools for investors to gain market insights, particularly through screening for institutional options activity and individual trader actions [1][2] Group 1: Stock Screening Tools - A basic stock screener is utilized to monitor market activity, incorporating options volume and filtering for a 52-week average options activity of 5,000 contracts for liquidity [3] - The screener includes metrics such as put-to-call ratio, implied volatility (IV), historical volatility (HV), and a 3-month average options volume percent change to offer an unbiased market overview [3] Group 2: Focus on Major Indices - The analysis focuses on heavily traded companies within the S&P 500 and Nasdaq 100, as well as high-volume stocks popular on platforms like Robinhood and Reddit [4] Group 3: Tesla Stock Analysis - Tesla (TSLA) was identified as a top stock for unusual options activity, with a 0% implied volatility rank indicating that TSLA options are currently at their lowest implied volatility in the past year [5] - The implied pricing shows a reasonable IV/HV ratio of 1.11, suggesting potential for a bullish move in TSLA shares, especially as the stock trades within a range that includes previous all-time highs [6]