Options Activity Prior to the 2022 Mid-Term Elections

If one was anticipating market participants to be a bit skittish and uncertain ahead of the U.S. Mid-term election, well you can see that there was bullish, deemed positive, price action today.

This will not be an article where we put our political views on display, nor would we ask anyone who they are voting for and why.

What we try and do is analyze the markets to gain an anticipated market direction and then entertain option trades based on that assessment.

The election results from Tuesday’s midterm election is going to determine which party will control Congress, thus affecting the direction of future spending.

It seems there are hopes some kind of Republican sweep of Congress will lead to either a sort of stalemate in Washington,  Right now Democrats control the House, and have a majority in the Senate.

A stalemate could be taken as a good sign no new spending is due to come our way.   According to RBC’s Lori Calvasina having a Democratic president, with a Republican or split Congress, has historically led to above-average gains.

Economic Items this Week

Aside from the election tomorrow the primary economic concern it seems is the Consumer Price Index number due out Thursday.

This number is going to give the Fed an indication as to how much more is needed to be done in their fight to stave off inflation.

Thursday also brings a report of the initial and continuing jobless claims.  We then end the week with the University of Michigan Consumer Sentiment.

Earnings

They are still ongoing, and we have numbers due out from major retailers next week such as Walmart and Home Depot before market open on Tuesday.  Target, Lowe’s, and TJX Companies report before market open on Wednesday. Ali Baba, Macys, and Kohls are due to report before market open Thursday.

Earnings from these retailers may not be the most important earnings for the season, but it will give a good gauge on what the consumer is doing or not doing and either back up that consumer sentiment number coming out or not.

All this is what’s going on this week.  If you are establishing a directional bias or not with all this at least take a look at where options activity is happening from the Morning Report lists to see where options traders are hanging out.

Morning Report Lists

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The last couple of lists are provided below.

One thing one can consider doing is look at the option from these lists that are of interest and at least document the closing price for the options in a notepad or online word doc.  Then track these through the week to see how they end up in a week and help with confirmation that having this info is prudent and something one and their broker can consider utilizing going forward.

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App: Toms Option Tools

Market Insight articles may show images of lists of stocks meeting a variety of options parameters like Unusual Call and or Put activity or Expensive IV found on my app Toms Option Tools.

Other times I will have other charts may work to amplify my educational points. 

Those options data lists, however, can be found on my app Tom’s Option Tools. Use your device to search up and download this app and get free access to the Morning Reports section of the app.

Other parts of the app are available at a premium subscription rate, but the Morning Reports Lists are yours free.