A massive trade just happened in a leading mortgage lender: Watch Options Action Live

For more options-trading reaction to the rally, click the link at the top of the page for Options Action LIVE featuring CNBC contributors Michael Khouw and Brent Kochuba alongside host Oliver Renick. Stocks are surging after midterms brought a Democratic blue wave and options traders are responding by selling volatility and embracing a rotation away from big-tech trades. The S&P 500 added just shy of 2% by midday Wednesday, recovering losses from Friday and Monday. The move in its corresponding options prices was even bigger, with the Cboe Volatility index falling about four points to below 17, the biggest one-day drop in the volatility gauge since at least July. Crude oil prices fell as WTI traded below $90 and energy stocks dropped 5.6% for the biggest decline in the S&P 500. Options on the State Street Energy Select Sector SPDR ETF (XLE) jumped to more than three times the 30-day average, with 57% puts by volume and the big-money trades concentrated in bearish put-buyers. The top trade in XLE was the 62.5-strike put expiring Jan. 15, suggesting it could be a slow rollover for what has been the best-performing sector of 2026, SpotGamma data show. With the drop in crude oil, a handful of inflation and interest-rate related trades got some bullish attention. Consumer discretionary stocks rallied almost 5% but options volume in the SPDR sector fund XLY was below average and volume was split between puts and calls, according to Cboe LiveVol data. Instead, there was some big action in a few housing trades such as Rocket Companies, the mortgage lender and Redfin owner that fell almost 50% this year before turning around last month. Options volume on Rocket was double the average with a strong bullish bias. Of the 110,000 options traded, 90% were calls and more were likely initiated by buyers than sellers. Bulls traded the bulls like the 14 and 16-strike calls expiring Nov. 20 the most. Opposite the drop in crude oil was a rally in solar energy companies, extending recent gains and extending unusual options activity that preceded the midterms. The Invesco Solar ETF (TAN) added another 9%, trading the highest since July. Options volume was more than five times the average and 80% of the volume was in calls. The most popular trade in TAN was the 48-strike call betting on a 6% rally through Nov. 20th. On the tech side, options flows looked bearish in the VanEck Semiconductor ETF (SMH), which fell 2.6% to the lowest since May. Options volume was twice the average, 70% of it puts, with the 475-strike put expiring Nov. 13 the most popular contract bought by volume.