Markets
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Luke Kawa

Is Robinhood feeding the frenzy of zero days to expiry options trading?

One thing I’ll be looking for when Robinhood Markets reports earnings after the close won’t show up in any of its fourth-quarter numbers. And that’s any color from management on early uptake of trading in index options, which launched on January 21, on the platform beloved by retail traders.

In particular, I’m interested in the extent to which the availability of these derivatives deepens the boom in trading of S&P 500 options with zero days to expiry. Yes, that’s same-day options punts, rapid theta decay be damned.

(Disclosure: Sherwood Media is an editorially independent subsidiary of Robinhood Markets Inc. I own HOOD stock as part of my compensation.)

S&P 500 options with zero days to expiry (0dte) have seen rapid growth, from an average of 932,744 traded daily in 2022 to upward of 1.5 million in 2024.

Now, correlation is certainly not necessarily causation here (and it’s still very early days), but there’s been an acceleration in the growth of S&P 500 0dte trading since the introduction of index options on the platform. The five-day average of 0dte S&P options traded is up about 0.5% from the first five sessions of the year through Monday. Post launch, volumes are up 2.4% compared to their prior 2025 average.

This includes (and may be distorted by) the record activity in these contracts in the final trading day of January, per Cboe.

On Tuesday, 0dte expiries were nearly 60% of S&P 500 option volumes traded, per Bloomberg data, up from an average of about 51% in the fourth quarter of 2024.

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Satellite stocks moon on elevated call options activity

A big day for AST SpaceMobile, Planet Labs, and Rocket Lab.

Matt Phillips13m
markets
Matt Phillips

Palantir continues its recent bull run as BofA analyst hikes target to $215

Palantir was less than 3% from its all-time closing high price in early trading Tuesday, with shares continuing a run that has carried them up nearly 20% since a recent low on September 5.

There’s no major news on the stock, but the defense and AI software company did collect a price target hike from Bank of America’s analysts. They slapped a $215 price objective on the shares, a roughly 18% premium to where the stock currently trades and the highest among the published price targets tracked by FactSet.

In their note, BofA’s analysts focused on the company’s usage of “forward deployed engineers” or FDEs, Palantir software workers who collaborate closely with clients to help organize, refine, structure, and connect the various pipelines of data that companies want to work with Palantir’s AI software. (I recently wrote a bit about them here.)

BofA’s stock scribes wrote:

“We see the AI FDEs as an accelerator of growth. By successfully implementing these breakthrough capabilities inhouse, the company will benefit from increased demand, scalability and empowered engineers that can focus on the most complex problems. We think more customers will be attracted to buy Palantir’s operating system (vs build their own) to accelerate the implementation of AI agents that extend their own unique abilities and core expertise. Additionally, these AI FDEs will allow Palantir engineers and the customers themselves to continue to create new use cases.”

In their note, BofA’s analysts focused on the company’s usage of “forward deployed engineers” or FDEs, Palantir software workers who collaborate closely with clients to help organize, refine, structure, and connect the various pipelines of data that companies want to work with Palantir’s AI software. (I recently wrote a bit about them here.)

BofA’s stock scribes wrote:

“We see the AI FDEs as an accelerator of growth. By successfully implementing these breakthrough capabilities inhouse, the company will benefit from increased demand, scalability and empowered engineers that can focus on the most complex problems. We think more customers will be attracted to buy Palantir’s operating system (vs build their own) to accelerate the implementation of AI agents that extend their own unique abilities and core expertise. Additionally, these AI FDEs will allow Palantir engineers and the customers themselves to continue to create new use cases.”

markets
Luke Kawa

Bank of America explains why Nvidia almost has to invest in OpenAI and Intel

Nvidia is in the business of giving tech bigwigs the tools to try to create God, and in the process, the chip designer has made more money than God.

Bank of America analyst Vivek Arya believes the company is poised to generate hundreds of billions in free cash flow over the next few years as it benefits from the AI boom. Management has to do something with all that money, which helps explain recent investments in OpenAI and Intel, in his view.

“Unlike the old days, investing in other public assets has become difficult given lack of strategic fit and the burdensome regulatory process,” he wrote. “Hence the only other alternative (beyond returning to investors) is to invest in the ecosystem to expand the size of the addressable opportunity that could multiply future benefits, or accelerate time to market for new products, and/or for geopolitical benefits (such as recent INTC investment).”

Investing in its customers is just another way of investing in its own success. And investing in the likes of Intel is a way to add some depth to its product shelf, and perhaps curry some political favor in the process.

Nvidia has been doing this up and down the supply chain, with investments in Applied Digital, Arm Holdings, CoreWeave (which is acquiring Core Scientific), and Nebius Group.

To re-up my previous thoughts on Nvidia’s “House of GPUs,” this degree of implicit vertical integration and platform deepening can be best understood as CEO Jensen Huang trying to ensure that all the possible near-term demand for AI that can be met is met through Nvidia, one way or another.

And accelerating time to market may not be the most desired outcome; as long as Nvidia’s offerings continue to be considered market-leading, advancing too quickly may effectively short-circuit the length of product cycles.

markets
Matt Phillips

SoundHound AI soars on deal to power Red Lobster phone orders

SoundHound AI jumped Tuesday after announcing a partnership with Red Lobster for an AI-powered phone ordering agent for takeout that will roll out across all the seafood chain’s locations.

The stock, which was a big favorite of retail shareholders last year when it delivered gains of 835%, has had a far rougher 2025. It was down as much as 60% back in April, but has clawed back to cut its year-to-date loss to roughly 7%.

Red Lobster Partners With SoundHound AI To Power Phone Ordering Across All Locations - SoundHound AI

Red Lobster Partners With SoundHound AI To Power Phone Ordering Across All Locations - SoundHound AI
markets
Matt Phillips

Firefly Aerospace dives after first earnings report

Firefly Aerospace, a Texas-based midcap builder of space launch vehicles, dove in early trading Tuesday after posting its first quarterly report since its August IPO.

Results were worse than expected. Sales dropped 26% to $15.5 million. And the company posted an adjusted loss per share of $5.78, compared to a loss of $4.60 per share last year.

Firefly Aerospace shares tumble after it posts widening loss, declining revenue

Firefly Aerospace shares tumble after it posts widening loss, declining revenue

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