Like clockwork, when a day's options volume is considerably below the 90-day average, unusual options activity is almost always much slower than usual.
That might seem obvious, but it took me several years of observing the relationship between the two to confirm it.
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In Wednesday's options activity, 56.33 million contracts were traded compared to a 90-day average of 63.45 million.
Yesterday's unusual options activity--defined as call and put options expiring in six days or more, Vol/OI (volume-to-open-interest) ratios above 1.24, volume of 500, and an open interest of 100 or more--saw no options with Vol/OI ratios greater than 100. Shoe Station Group’s (SHOE) Oct. 16 $12.50 put’s Vol/OI ratio of 93.57 was the highest on the day.
While that means it’s harder to find interesting bets, it’s not impossible. Plenty of interesting opportunities lurk in the unusual options activity.
Here are three bets that jump out to me from yesterday’s trading.
Retail Catches Investor Interest
Retailers Macy’s (M) and Gap (GAP) were the second- and fourth-highest Vol/OI ratios yesterday at 57.85 and 39.48, respectively. Both had options volume well above their 30-day averages. That’s especially true for Macy’s, with volume 4.6 times the average and the fifth-highest in the past 12 months.
Drilling into Macy’s options flow from yesterday, there was a 10,000-contract trade for the Jan. 15 $23 call at 1:32 p.m. ET. The trade was at the $2.07 ask price, indicating a very bullish bet by an institution that carries beyond this morning’s earnings report by the department store chain.
Lo and behold, Macy’s reported strong earnings this morning before the open. On the top line, revenue was $5.06 billion, up 1.2% from a year ago and beating Wall Street’s $5.01 billion estimate. On the bottom line, adjusted earnings per share were $0.63, up 80% from Q2 2025 and 26 cents above the consensus. Equally important, it was the retailer’s fifth consecutive quarter of same-store sales growth.
Even better, Macy’s raised its guidance for the year. It now expects $21.75 billion in revenue and $2.25 EPS. Who said department stores were dead?
Interestingly, as I write this before Thursday’s opening, the stock is down nearly 4%. Barchart’s research team chimed in yesterday, suggesting that Macy’s tariff refunds are already priced into the share price, even though its turnaround hasn’t yet been proven successful. A $2.07 million options bet says otherwise.
As for GAP, no single trade stands out from yesterday on the Jan. 15 $24 call. With volume of 10,029, the largest trade for the call was a 259-contract trade at 1:19 p.m. ET. It was made along with three others for a total volume of 741, or 7.4%.
We have several Bull Call Spreads, all executed at once in yesterday’s trading. While there is an imbalance of 143 contracts between the $24 and $27 calls—741 to 598—the option time and sales show many smaller, but still significant, trades filling the difference.
Using the 259-contract example, the trader/institution bought 259 $24 long calls for $33,100 and sold 259 $27 short calls for $15,200 premium, reducing the net debit to $17,900, which is also the maximum loss. Meanwhile, the maximum profit is $59,829 [$27 strike price - $24 strike price - $0.69 net debit *259 * 100].
That’s a maximum profit percentage of 334.24% and a risk/reward ratio of 0.30 to 1. It’s a low-risk bet on more good news from GAP in the next four months.
One of Berkshire Hathaway’s Largest Holdings Looks to Benefit From Higher Oil Prices
With oil prices over $100 for the first time since July, it’s understandable that an oil & gas producer like Occidental Petroleum (OXY) would have two of the top 11 Vol/OI ratios in yesterday’s trading. In addition to the two calls above, it had 10 other calls with Vol/OI ratios of 1.24 or higher, with strike prices ranging from $35 to $67.50. Except for the Oct. 16 $67.50 call, the other 11 expire in a week.
I’m a big fan of Berkshire Hathaway (BRK.B) stock. It owns 26.5% of the Houston-based company. Its $16.24 billion stake in OXY accounts for 4.5% of Berkshire’s $358 billion equity portfolio, making it the seventh-largest holding. If you like OXY, buying Berkshire stock is a much safer way to gain exposure to the company. But I digress.
Looking at OXY options flow from yesterday, I’ll focus on the 11 expiring on Sept. 18. There were 136 trades over 100 contracts and 17 trades for over 1,000 contracts and none over 10,000 for calls expiring next Friday. The top trades were for 8,647 each, involving the $63 and $64 calls shown above.
What’s interesting is that the two trades were equal-sized, accounted for most of the day’s volume for the $63 and $64 calls, and were done at the same time.
Further, the (O), “To Open,” and (B), “Buy to Open," suggest that the institution was completing an algorithm-based trade for 17,294 call contracts. Rather than push the entire order through at once and raise the cost, it split the trade in half. I don’t know what the trade price would have been for 17,294 contracts at once, but assuming it was around $0.80, the split saved the institution about $466,938, or 34% of the estimated $1.38 million cost. That’s not insignificant.
The Barchart Technical Opinion for OXY is a 100% Strong Buy. The institution has made a big bet that OXY will revisit its March 31, 52-week high -- and 2-year high -- of $67.45 in the next week. While the expected move says it won’t, any more activity in the Middle East should accelerate the possibility.
Cruise Operators a Casualty of Higher Oil Prices
Carnival (CCL) had the seventh-highest Vol/OI ratio yesterday at 33.56. In addition to the Sept. 17/2027 $18 put, it had two other unusually active options: Dec. 18 $23 call at 15.52 and the Dec. 18 $23 put at 4.50. Royal Caribbean Cruises (RCL) also had one: the March 19/2027 $250 put at 6.53.
You’ll notice that all four have expirations of 100 days or longer. While not technically LEAPS (Long-Term Equity Anticipation Securities) because they’re less than 365 days, they are relatively unique. In yesterday’s options trading, just 4% of the volume was for expirations of 91 days or longer.
This tells me that somebody believes the cruise industry is going to suffer greatly from the never-ending war with Iran, which is creating higher costs for cruise ships once again and likely many more times over the next year.
Several trade possibilities exist, but I’ll focus on the CCL Dec. 18 $23 call and put.
As you can see, there were two 5,000-contract trades at 3:17 p.m. ET yesterday. The put trade accounted for 99.2% of the volume on the day, while the call trade accounted for 96.7%. If that’s not a sign, nothing is.
This is a classic Long Straddle. It involves buying both the $23 call and $23 put. You’re looking for CCL’s share price to move significantly in either direction before Dec. 18. The net debit for yesterday’s long straddle was $4.39 (the number below is based on today’s activity), a $2.2 million bet on increased volatility.
The institution makes money if CCL’s share price is above $27.39 or below $18.61 at expiration. That’s a 20.4% move on the upside and an 18.2% move on the downside. The expected move is 15.89%, which explains the 42.2% profit probability.
Of the two directions, I would say the downside is where it will make its money, but you never know with these markets. The Barchart Technical Opinion is a 100% Strong Sell. Down 26% in 2026; you know what they say about an object in motion: it tends to stay in motion.
On the date of publication, Will Ashworth did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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