Options Weekly Roundup - AI Capex Jitters, Fed Succession Headlines, Cryptos Crash, and Violent Rebound: A Wild Week for the Street and Investors

Moo Options Explorer joined discussion · Feb 9 03:17

Hello Mooers,

U.S. stock had a turbulent week (Feb 2–6, 2026), finishing with a powerful Friday rebound. The Dow hit fresh records and briefly cleared 50,000, while the S&P 500 and Nasdaq rallied sharply into the close—yet the week still showed rotation: Dow outperformed as parts of mega-cap tech stayed under pressure after several down sessions.

Macro headlines and “liquidity” narratives drove sentiment. President Trump’s pick of Kevin Warsh as the next Fed chair revived debate on the future policy path, while mixed U.S. data (manufacturing improving, but some labor indicators softening) kept rate expectations choppy.

Earnings amplified the AI capex debate. Amazon’s heavy 2026 spending plans weighed on broader tech even as they reinforced the data-center buildout theme; semis rebounded late-week with Nvidia leading. Health care also offered pockets of strength as investors favored clearer earnings visibility.

Crypto saw similar de-leveraging: Bitcoin swung sharply on liquidation-driven volatility before stabilizing into week-end.

What's trending last week?

1. The cryptocurrency market experienced a volatile week last week, with Bitcoin dropping to a low of $60,000 during intraday trading on Thursday before rebounding. The sharp decline in the cryptocurrency market dragged down stocks related to the crypto circle, with MSTR plummeting 17% on Thursday and barely holding above the $100 mark.

@Monta HONG CFA conducted an in-depth analysis of MSTR's debt structure and proposed a trading strategy of selling puts to earn premiums.

Why Is Now a Good Time for SELL PUT?

(1) Implied Volatility Elevated: Current $iShares Bitcoin Trust (IBIT.US)$ and $Strategy(MSTR.US)$ options implied volatility has risen significantly to 100% IVP, meaning IV is higher than 100% of time in past year and if you sell options you get richer premiums. If you buy options, no matter call or put, it becomes harder to earn money in this envirnoment.

Options Weekly Roundup - AI Capex Jitters, Fed Succession Headlines, Cryptos Crash, and Violent Rebound: A Wild Week for the Street and Investors

(2) Sentiment Extremely Bearish: Market panic is often the best time to sell puts, as extreme bearish pricing typically corrects

(3) Support Level Protection: $60,000 is a support level at least so far, limiting downside

(4) Time Decay: As option seller, time is your ally - you earn theta decay daily. read more>>

2. Precious metal prices continue to fluctuate violently. @Monta HONG CFA believes that the repeated sharp rises and falls in the prices of GLD and SLV have caused a severe Gamma Squeeze in the options market, creating a domino effect and accelerating the speed of price collapse. He also provided in the article an options strategy to deal with such an extremely volatile market.

To understand the crash, you have to understand the boom. Over the past few weeks, investors poured billions into GLD and SLV. They bought record amounts of Call Options betting prices will go up. Option volumes for both GLD and SLV hit record highs last Friday.

On the other side of every trade is a Dealer, also known as Market Maker. These dealers sold the options to the public. Dealers don't like to gamble; they want to stay neutral.

– On the way up: When you buy a Call, the dealer sell a call and has to buy the actual metal (futures or shares) to hedge their risk. As millions of people bought Calls, dealers were forced to buy billions of dollars of Gold and Silver. This created a "loop" that pushed prices higher.

– The Reversal: But this works in reverse, too. When the news about Kevin Warsh broke, the dollar debasement bubble popped slightly. Prices dipped. Dealers who were holding massive amounts of Gold and Silver to hedge those options no longer needed them. They had to sell. read more>>

3. The post-earnings performance of the technology sector has been mixed. For example, Palantir opened 12% higher after earnings but was dragged down by the overall market slump, falling below the low point of last November's adjustment on Thursday.

Facing Palantir's post-earnings trend, @ImSteven conducted a detailed analysis of Palantir's valuation and provided ideas for options trading.

...from an options standpoint, the most sensible approach is to sell puts below the market (short puts). If the valuation is still elevated and you don’t want to buy shares outright at these levels, you can lower your effective entry by choosing a lower strike and selling puts—collecting premium while building a meaningful cushion in case you’re assigned. Since Palantir’s implied volatility (IV) remains relatively high, you can push strikes down to much lower levels and still receive decent premium.

Management’s 2026 revenue outlook is about $7.2 billion, and with a market cap around $350 billion, the stock is trading at roughly 50x forward sales. If we assume it takes two years for the P/S multiple to normalize toward something like 15x, then a “low” level for the first year (2026) might be 26–28x. A 26–28x P/S would roughly correspond to a stock price around $100. That makes $100 a key price level—also a psychologically important round number that could act as strong support. read more>>

Trading Insights

1. Regarding the recent sharp decline in the software (SAAS) sector, @Monta HONG CFA analyzed the reasons in the article and distinguished which stocks truly face risks and which may have been wrongly sold off.

AI won't eliminate underlying demand, and the needs remain. But only companies that embrace AI effectively will survive. Think of the touchscreen revolution: $Apple (AAPL.US)$ thrived by embracing it, while $Nokia Oyj (NOK.US)$ and $Motorola Solutions (MSI.US)$ were left behind. The same dynamic is playing out in Software today.

To understand what is happening, we need to look at the AI 5-Layer Cake per Jensen Huang, NVIDIA CEO.

Currently, the first 3 layers are making money, while the latter two are losing money. This is similar to the internet era— Intel made profits first, and finally software companies like Meta.

In AI's early stages, the market has been heavily investing in the first 3 layers, which makes sense. However, the market also believes AI will develop faster than the internet era, achieving revenue and profitability more quickly. That's why investors are racing to invest in AI applications early, pushing valuations higher. Nobody wants to miss out on the opportunity. read more>>

2. Google's stock price hits a record high, and @Invest with Sarge presents his technical analysis and options trading ideas

Running just below this wedge is the stock's 50-day Simple Moving Average, or "SMA," marked with a blue line. This means that losing the rising wedge's lower trendline could accelerate into a real breakdown if Alphabet doesn't quickly find support at the 50-day SMA line.

Meanwhile, Alphabet's Relative Strength Index (or "RSI," denoted by a gray line at the chart's top) is quite robust, although not in a technically overbought state. That said, the stock's daily Moving Average Convergence Divergence indicator (or "MACD," marked with black and gold lines and blue bars at the chart's bottom) is in a far more precarious position.

In fact, the MACD appears to be setting up for some volatility in the near term, as it's giving us mixed messages.

The histogram of the stock's 9-day Exponential Moving Average (or "EMA," denoted by blue bars) is running very close to the zero-bound, which is neither bullish nor bearish.

However, both the 12-day EMA (the black line) and 26-day EMA (the gold line) are running well into positive territory. That's bullish.

Conversely, the 12-day EMA is flirting with the possibility of crossing below the 26-day EMA. That would be a medium-term bearish signal if it happens. read more>>

Riding the Wave

The sharp fluctuations in the market have created lucrative trading opportunities. @包小姐的养老金has taken advantage of the stock price fluctuations of Apple and Netflix, combined with end-of-life options, to easily make profits. Readers should understand from this that even for Mag stocks like Apple and Netflix, as long as options are used effectively, excess returns can still be generated. read more>>

In the market situation where the cryptocurrency crash led to a sharp decline in cryptocurrency stocks, user @nowuuuh took advantage of MSTR's periodic options to bet on a decline and achieved nearly 10-fold profits. read more>>

Looking Forward

This week, more major companies will report earnings:

– Monday after-hours: ON

– Tuesday pre-market: KO / after-hours: HOOD

– Wednesday after-hours: CSCO, APP

– Thursday after-hours: AMAT, NBIS

In addition, U.S. January nonfarm payrolls will be released before the open on Wednesday (2.11), CPI data will release on 2.13, Friday pre-market. With multiple macro, geopolitical, and earnings factors in play, market volatility may pick up this week—creating more opportunities for options trading!

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Stay tuned for more, and happy trading! 🌟