Unusual Options Activity Points to Big Institutional Bets on These 3 Industries

Like clockwork, when a day's options volume is considerably below the 90-day average, unusual options activity is almost always much slower than usual.

That might seem obvious, but it took me several years of observing the relationship between the two to confirm it.

In Wednesday's options activity, 56.33 million contracts were traded compared to a 90-day average of 63.45 million.

Yesterday's unusual options activity--defined as call and put options expiring in six days or more, Vol/OI (volume-to-open-interest) ratios above 1.24, volume of 500, and an open interest of 100 or more--saw no options with Vol/OI ratios greater than 100. Shoe Station Group's (SHOE) Oct. 16 $12.50 put's Vol/OI ratio of 93.57 was the highest on the day.

While that means it's harder to find interesting bets, it's not impossible. Plenty of interesting opportunities lurk in the unusual options activity.

Here are three bets that jump out to me from yesterday's trading.

Retailers Macy's (M) and Gap (GAP) were the second- and fourth-highest Vol/OI ratios yesterday at 57.85 and 39.48, respectively. Both had options volume well above their 30-day averages. That's especially true for Macy's, with volume 4.6 times the average and the fifth-highest in the past 12 months.

Drilling into Macy's options flow from yesterday, there was a 10,000-contract trade for the Jan. 15 $23 call at 1:32 p.m. ET. The trade was at the $2.07 ask price, indicating a very bullish bet by an institution that carries beyond this morning's earnings report by the department store chain.

Lo and behold, Macy's reported strong earnings this morning before the open. On the top line, revenue was $5.06 billion, up 1.2% from a year ago and beating Wall Street's $5.01 billion estimate. On the bottom line, adjusted earnings per share were $0.63, up 80% from Q2 2025 and 26 cents above the consensus. Equally important, it was the retailer's fifth consecutive quarter of same-store sales growth.

Even better, Macy's raised its guidance for the year. It now expects $21.75 billion in revenue and $2.25 EPS. Who said department stores were dead?

Interestingly, as I write this before Thursday's opening, the stock is down nearly 4%. Barchart's research team chimed in yesterday, suggesting that Macy's tariff refunds are already priced into the share price, even though its turnaround hasn't yet been proven successful. A $2.07 million options bet says otherwise.