March 5, 2025
Marvell (MRVL) Earnings
Marvell (MRVL) will report earnings today after the close. Heading into the announcement, the stock has been battered much like all AI/Semiconductor plays.
I am going to take the risk and hold my position through earnings as any positive signs from the company could result in a big move higher, which would spike our calls back to life. Also, our calls don’t expire until June, so we have some time. However …
The market looks dreadful, and if the company disappoints on earnings, it could mean more pain for our trade. And in fact, just this morning, growth stocks CRWD and CRDO, which have been under pressure for the last month, fell yet again on earnings. So there is risk!
MRVL - With the stock trading at 88, the options market is pricing in a move of $10 this week, or 78 to the downside and 98 to the upside.
Open interest is split evenly call vs. put.
Skew is pricing in extreme downside risk as well as upside interest.
March 4, 2025
Option Activity Swinging Bullish
The market meltdown of the last two weeks has been dreadful to say the least. And while I am “worried” that this is the start of a more meaningful decline, I am encouraged by bullish option positioning today. Here is a small sample of that activity:
Bullish Order Flow:
Buyer of 27,000 Broadcom (AVGO) June 240/270 Bull Call Spread for $2.70 – Stock at 183
Buyer of 15,000 Broadcom (AVGO) July 250/300 Bull Call Spread for $3.75 – Stock at 188
Buyer of 10,000 Eaton (ETN) September 340/390 Bull Call Spread for $6.20 – Stock at 276
Buyer of 1,000 Astera Labs (ALAB) April 70 Calls for $6.90 – Stock at 66
Buyer of 1,000 Astera Labs (ALAB) April 75 Calls for $5.50 – Stock at 67
Buyer of 10,000 Schlumberger (SLB) August 45 calls for $1.45 – Stock at 39 (rolled back from August 47.5 calls)
Buyer of 10,000 Schlumberger (SLB) June 42.5 Calls for $1.60 – Stock at 39 (rolled back from June 45 calls)
Buyer of 2,000 Gilead (GILD) March 120 Calls for $0.97 – Stock at 115
Buyer of 1,800 Shopify (SHOP) July 90/140 Bull Call Spread for $15.50 – Stock at 100
Buyer of 4,000 Robinhood (HOOD) March 50 Calls for $2.20 – Stock at 47.
As noted above, this is just a small sample of the bullish option activity, and doesn’t even include the fairly widespread put selling (bullish as well).
Let’s see if this bullish positioning continues later today and tomorrow. If that is the case (big if) we could get back to adding to the portfolio.
March 3, 2025
Weekly Update
For the second straight week growth stocks got hit hard, which weighed on the Nasdaq. Though interestingly as money rotated out of the 2024 leaders, it raced into slow and steady stocks that have been left behind in years past. By week’s end the S&P 500 had lost 1%, the Dow had gained 1%, and the Nasdaq had fallen 3.5%.
Stocks on Watch and What Traders are Saying
As growth stocks melted down last week money quickly rotated into other sectors and stocks. But first, here is some data on how bad (and fast) the growth sell-off has been via @bespokeinvest on X:
Nasdaq is currently down 6.3% in February. In February 2020 (heart of Covid), it was down 6.4%.
The Nasdaq 100 just had its fastest 5%+ decline from an all-time high (6 trading days) since September 2020.
So as money flees the Nasdaq, where is it going? Here are the best-looking stocks and sectors that have led in early 2025:
Healthcare – AbbVie (ABBV), Abbott Laboratories (ABT), McKesson (MCK), Gilead (GILD), Baxter (BAX)
International – European Financials (EUFN), Deutsch Bank (DB), China ETF (MCHI), Alibaba (BABA)
Insurers – Progressive (PGR), Marsh & McLennan (MMC)
Consumer – Visa (V)), Starbucks (SBUX), Dutch Bros (BROS), Costco (COST), Take-Two Interactive (TTWO), Garmin (GRMN), Hilton Worldwide (HLT)
“Slower” Tech – Cisco (CSCO), IBM (IBM), Corning (GLW)
Now that February has turned to March it will be interesting to see if the calendar flip to a new month changes the tone of the market, and growth gets off its deathbed … OR it’s also possible that 2025 will be a year for the stocks and sectors above to continue to be the big winners.
Volatility
The Chicago Board of Options Exchange Volatility Index (VIX) closed the week higher at 19.5, which is interesting as the S&P 500 fell but was not a disaster last week, while the Nasdaq got walloped and growth stocks were a disaster. Essentially the VIX, which is a measure of fear/market movement for the S&P 500, is pricing in some of the Nasdaq risk into the S&P 500 … perhaps a fear of the Nasdaq weakness bleeding into the S&P 500.
Option Order Flow was fairly mixed this past week as my Options Barometer came in at:
Monday – 5
Tuesday – 5
Wednesday – 5
Thursday - 5
Friday – 5
Events for the Week to Come
Politics and macro-economic data will garner much of the attention of traders this week as Tariffs on Canada and Mexico will go into effect on Tuesday (maybe), and on Friday the February Jobs Report will be released.
On the earnings front, it will be another busy week with a mix of Retail and Tech companies reporting quarterly results, including:
Monday – Okta (OKTA), GitLab (GTLB)
Tuesday - Target (TGT), Best Buy (BBY) ON Holding (ONON), CrowdStrike (CRWD)
Wednesday – Abercrombie & Fitch (ANF), Marvell Technology (MRVL), Veeva Systems (VEEV), Zscaler (ZS)
Thursday – BJ’s Wholesale (BJ), Broadcom (AVGO), Costco (COST), Samsara (IOT)
Open Positions
Corning (GLW) May 47 Calls – GLW has pulled back, but has hardly been a disaster like so many stocks with AI exposure. And on Friday a trader bought this large bull call spread:
Friday - Buyer of 22,000 Corning (GLW) November 60/70 Bull Call Spread for $1.53 – Stock at 49.5.
Grab Holdings (GRAB) January 5 Calls – Much like GLW above, GRAB has pulled back, but still looks mostly fine. I like our trade should GRAB really ramp again.
Marvell (MRVL) June 115 Calls – MRVL along with so many AI/Semiconductors got nailed last week. The company will report earnings on Wednesday and we certainly are looking for a big stock reaction.
Occidental Petroleum (OXY) March 52.5 Calls – Time is running out fast on our OXY calls and I may soon bail on this trade.
Financials ETF (XLF) June 50 Calls – The XLF spiked back near its 52-week high on Friday and fits in the category of stocks/sectors listed above that have taken the lead as 2024 leaders have fallen off.
Jets ETF (JETS) January 26 Calls (exp. 2026) – The JETS continues to be a bit of a sloppy mess, which is not great. That being said, our calls have so much time, so I’m not too concerned with the day-to-day stock movement.
Sofi (SOFI) July 16 Calls – SOFI stock is nuts (as expected) and is moving with growth stocks (as expected). Hopefully that group gets back in gear and so does SOFI. Of note, option activity has been strong in the stock throughout the sell-off.
Starbucks (SBUX) January 110 Calls – SBUX looks great as the stock busted out to a new high on Friday. I really like the way SBUX has been trading as well as our position.
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