Options Brief - Back from the Holiday, Rally Cools - 6 July 2026
By Koen Hoorelbeke, Investment and Options Strategist
Summary
The US markets reopened after the Independence Day holiday, with European markets reaching record highs and South Korea's chipmakers continuing their rebound. However, the momentum appears to be cooling as the session progresses. The options market is analyzed to understand current pricing dynamics.
Market Overview
US cash equities and listed options were closed on Friday due to the holiday. European markets closed at record highs, with the Euro STOXX 50 rising by 0.8% and the STOXX 600 gaining 0.7%. The Kospi in South Korea surged by 5.8%, recovering from a previous drop, driven by optimism in AI-chip technology.
Market Regime
The current market regime is characterized as a low-volatility bull market, with the VIX at 15.81. The term structure is in contango, indicating a premium for longer-dated VIX futures. The skew remains elevated at 150.02, suggesting ongoing demand for downside protection despite recent market rallies.
Market Pricing Insights
With no new US session to react to, the options market indicates an expected move of approximately 45 points (0.60%) for the SPX today. The upcoming FOMC minutes are anticipated to be a significant market catalyst, alongside the opening of the Q2 earnings season.
Special Focus: SK Hynix ADR Listing
SK Hynix is set to list American depositary receipts on the Nasdaq, targeting a historic $29.6 billion raise. This would surpass Alibaba's previous record. The listing is expected to be a significant event, with proceeds aimed at expanding memory capacity.
Conclusion
While European markets and Korean chipmakers show positive momentum, the cooling tech bounce and a stronger dollar indicate that market conviction may be weaker than it appears. The options market suggests a moderate expected move, reflecting cautious sentiment ahead of key economic indicators and earnings reports.