Noteworthy Tuesday Option Activity: SITE, DKS, ZM

Dick's Sporting Goods saw 4,264 options contracts trade (≈426,400 underlying shares), equal to about 43.1% of its one‑month average daily volume, with concentrated activity in the $155 put expiring March 20, 2026 (3,500 contracts ≈350,000 shares). Zoom Communications recorded 17,108 contracts (≈1.71 million shares), about 42.4% of its one‑month ADV, led by the $140 call expiring June 18, 2026 (1,949 contracts ≈194,900 shares). The outsized options flows for both tickers represent significant positioning versus typical daily share turnover and may signal speculative or hedging activity that could affect short‑term liquidity and price moves.

Analysis

Market structure: The outsized flows (DKS ~350k shares in Mar‑20‑2026 155 puts; ZM ~195k shares in Jun‑18‑2026 140 calls) represent ~42–43% of each name’s ADV and signal concentrated directional interest or large hedges. Winners are option buyers/speculators and any market makers who can monetize implied vol; losers are uncovered equity holders in DKS if downside accelerates and short‑vol sellers caught on the wrong side. The demand profile shows explicit skew—downside protection for DKS and convex upside for ZM—pointing to asymmetric supply/demand in single‑name vol rather than a broad market move.

Risk assessment: Immediate (days) risk is gamma‑hedge driven intraday volatility; market makers adjusting deltas could amplify moves. Short/med term (weeks–months) risks include earnings, consumer‑spend data and enterprise IT spend revisions which could flip sentiment quickly before the Mar and Jun 2026 expiries. Tail risks: large block trades could be part of structured collars or index hedges, regulatory/credit events in retail or a sudden enterprise spending pullback could produce >30% moves; second‑order risk is cross‑position hedging that drags sector peers.

Trade implications: Direct plays: tactical long ZM upside via Jun‑18‑2026 call spreads and defensive DKS downside via Mar‑20‑2026 put spreads or cash‑secured puts if willing to own below 155. Pair trade: go dollar‑neutral long ZM (2% portfolio) / short DKS (1–2%) to capture dispersion between remote‑work software and consumer retail. Options: favor defined‑risk verticals to limit tail exposure; scale in over 2–4 weeks and trim at +30–50% gains or stop at −25% loss.

Contrarian angles: The market may be overstating directional certainty—large block volume is often hedging larger equity positions, not pure directional bets; if IV is rich (>30% vs historical), selling wings or put spreads in DKS can harvest premium. Historical parallels (large single‑name flow spikes in 2020–21) show moves can mean‑revert once liquidity providers neutralize deltas, so avoid one‑ticket all‑in positions; unintended consequence: aggressive market‑maker hedging can create short squeezes in either name, so size and timebox trades.

Key Decisions for Investors

• Establish a tactical 2% portfolio long in ZM using Jun‑18‑2026 140/180 call spreads (defined risk); scale in over 2 weeks, target +40–60% return, trim at +30% and fully exit at +50% or if implied vol falls >10 vol points.
• Establish a 1–2% portfolio bearish position in DKS via Mar‑20‑2026 155/140 put spreads (defined risk). Alternatively, sell cash‑secured DKS Mar‑20‑2026 155 puts sized to 1% portfolio only if collected premium ≥5% of strike and IV ≥30%, with assignment tolerance to own at 155.
• Implement a dollar‑neutral pair: long ZM equity or calls (2%) funded by short DKS equity (1–2%) to harvest sector dispersion; rebalance weekly and close the pair if divergence narrows to <5% or widens >30% intraposition.
• Risk rules: cap total portfolio exposure to these trades at 4%; set single‑trade stop at −25% (options) / 10% (equity), and monitor daily options volume >30% of ADV—if sustained for >5 trading days, reduce size by 50% due to potential informed‑flow.