RTX Stock’s Unusually Active May 1 $220 Call Is a No Brainer

Investors took a victory lap yesterday — the S&P 500 gained 2.5%, delivering a rare gap up — but the future is far from clear.

The fact that the ceasefire agreed to by the U.S., Iran, and Israel is already hanging on by a thread, the uncertainty should have most investors in a neutral stance right now.

On Monday, MarketWatch contributor Barbara Kollmeyer discussed why the S&P 500 could drop to 6000 before it reaches a new high.

“The bottom line is that many investors are looking past Middle East tensions, assuming stocks will swiftly return to prior highs, but ‘the reality is we are lacking the fully oversold conditions that typically accompany a breach of the 200 DMA,’ he said,” Kollmeyer referring to BTIG chief market technician Jonathan Krinsky.

Prior to yesterday’s move, the index had traded below its 200-day moving average (MA) since March 19. Krinsky suggests that as long as the index doesn’t close above 6,800, it could drop to 6,150 or lower.

Further, the last time the index traded below its 20-day MA was from February to May 2025. Before that, it was September to October 2024.

So, the gap up yesterday could be good, or it could be a head fake on its way down. Fortunately, I’m not a market timer.

In yesterday’s unusual options activity, RTX (RTX), maker of Pratt & Whitney jet engines, had the most unusually active option on the day. Its May 1 $220 call had a Vol/OI (volume-to-open-interest) ratio of 217.22, more than double Rocket Lab’s (RKLB) Jan. 21/2028 $85 call at 92.93.

Whether you are big into options or not, RTX’s call is a no-brainer. Here’s why.

As you can see, the call had a volume of 23,400 yesterday, 217.22 times the open interest. There wasn’t one massive trade, but a bunch of medium-sized bets — 10 of 500 or more contracts and 41 between 100 and 500 contracts. That tells you interest was broad among institutional investors. But there were also many trades of one or two calls by retail investors.

The net trade sentiment for RTX options on Wednesday was bullish at…

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