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Weekly Options Strategy 0202 | Gold and Silver Crash, Coping Strategies After the 'Warsh Storm'; AMD and Amazon Earnings Reports Incoming, Where Are the Trading Opportunities?

This article is from the "Weekly Options Strategy" column, which brings fellow investors a review of last week's market, the hot topics of the week, and an analysis of potential options trading opportunities. Welcome!click hereto join the learning journey. You will receive notifications when new updates are available in this column.

Dear fellow investors, happy Monday~

This week remains a pivotal week for global markets with major events unfolding: The nomination of the Federal Reserve Chair has finally been decided, with Kevin Warsh's inclusion triggering a global capital 'repricing of expectations' wave. In addition, the US January non-farm payroll data and unemployment rate are set to be released, further escalating macro-level uncertainty. Meanwhile, the precious metals market experienced a 'bloody collapse' last Friday, with gold and silver prices plunging. Whether this presents an opportunity to enter the market has become a hot topic of discussion.

In terms of earnings reports, $Advanced Micro Devices (AMD.US)$ 、 $Alphabet-A (GOOGL.US)$$Alphabet-A (GOOGL.US)$ 、 $Amazon (AMZN.US)$ Tech giants such as AMD will release their quarterly earnings reports. AMD's report will further validate the narrative of server CPU shortages, while Google and Amazon focus on whether cloud business growth can continue to accelerate, both carrying high market expectations.

In response to these complex and volatile market dynamics, we will dissect the core logic and clarify the impact pathways to precisely identify options trading opportunities tailored to the current fluctuating market conditions!

The selection of the Fed Chair has finally been confirmed, how to respond to the 'Warsh Storm'?

Last Friday, US President Donald Trump officially nominated former Federal Reserve Governor Kevin Warsh as the next Fed Chair to replace Powell, whose term will expire in May of the same year.This decision ended months of speculation and immediately triggered a severe 'expectation repricing' storm across global capital markets.

Following the announcement, financial markets reacted swiftly and sharply. The overall performance was characterized by a strong dollar, falling US stocks, steepening US Treasury yield curve, and a collapse in precious metals, reflecting market pricing for potential liquidity tightening and easing concerns over the Federal Reserve's independence.

Additionally,At 21:30 Beijing time on Friday (February 6),the US Labor Department will also release January's non-farm payroll data and unemployment rate figures, providing a litmus test for policy calibration amid heightened macroeconomic uncertainty. Market expectations are for an increase of 67,000 new non-farm jobs, with an unemployment rate of 4.4%.

Opportunity Analysis

The reason for the significant shock caused by Warsh's nomination stems from his complex and seemingly contradictory policy stance. During his tenure as a Federal Reserve Governor from 2006 to 2011, he became known for his high vigilance towards inflation and opposition to large-scale asset purchase programs (QE), with CNBC at the time referring to him as a hard money hawk,。

Despite market concerns about his hawkish comments between 2006-2011, it is important to note that his recent remarks have shifted towards dovishness, suggesting Warsh might advocate more aggressively for interest rate cuts than Powell.Wash's core proposition is a unique 'three-axis' framework: linking interest rate cuts with the deflationary effects caused by AI productivity improvements, reducing the Federal Reserve's balance sheet (QT), and promoting structural reforms within the Fed. He advocates that the Fed should return to being 'a central bank with limited functions,' focusing on prices and employment.The key risk is that Wash may advocate for reducing the Federal Reserve's balance sheet, which could lead to upward pressure on long-term interest rates.

The market is confused about Wash's combination of 'rate cuts + balance sheet reduction,' but this is not an original idea; the most recent instance was not long ago.In September 2024, the Federal Reserve announced a 50 basis point cut in the federal funds rate target range, the first rate cut since March 2020, initiating a rate-cutting cycle that has continued to this day. At the same time, the meeting statement indicated that the reduction would continue at the previously scheduled pace, with a monthly reduction of $60 billion in Treasuries and $35 billion in MBS. At the time, it did not have a significant impact on the market, which continued to new highs after a brief period of volatility.

Wash's father-in-law is a long-term Republican donor and an old friend and key supporter of Trump. This relationship is a crucial political asset for Wash's nomination in 2026, meaning his policy positions must be coordinated with the White House's political demands.In other words, even if Wash really wants to adopt policy proposals from over a decade ago, if it causes significant volatility in the financial markets, it will be difficult to ignore Trump's focus on the capital markets (just the other day, Trump publicly stated that the stock market would double).

Currently, Wash has not made any statements regarding market speculation.According to procedure, Wash’s nomination will first be submitted to the Senate Banking Committee for a hearing, which will also be an opportunity for investors to understand Wash’s latest policy inclinations.

Options strategy

Market panic is still fermenting. As of the time of writing, futures for the three major US stock indexes are all declining, and the Asia-Pacific markets generally fell at Monday's opening. After Friday’s market adjustment, $SPDR S&P 500 ETF (SPY.US)$ and $Invesco QQQ Trust (QQQ.US)$ volatility increased somewhat.But overall, it remains at a relatively low level (SPY's IV rank is 11, QQQ's IV rank is 15).。

If expecting increased market volatility, one can adopta Long Straddle or Long Strangle strategy,simultaneously buying Calls and Puts, allowing for profits as long as the stock price deviates significantly from the strike price. When market consensus is mixed or expected volatility is high, these strategies capture opportunities in both upward and downward directions, avoiding the risk of one-sided bets.

Precious metals crash: Is it time to enter after Bloody Friday?

Last Friday, the precious metals market experienced a major crash, and the decline continued into this week without stopping. Last Friday, spot gold prices plunged sharply from near $5,600/ounce, with an intraday drop of over 12%; the selloff in spot silver was even more severe, plummeting nearly 36% at one point.

On Monday, aftershocks persisted in the market, with an early V-shaped reversal followed by further declines. As of press time, $XAU/USD (XAUUSD.CFD)$ gold has dropped to around the $4,400 mark, $XAG/USD (XAGUSD.FX)$ while silver approaches the $70 level.

Opportunity Analysis

Gold had already seen significant gains in 2025 and accelerated its rise at the beginning of 2026, frequently setting new all-time highs. Silver’s surge was even more aggressive, being viewed as “the second derivative of gold,” combined with AI-driven industrial demand narratives, resulting in unprecedented volatility.

Following the sharp decline, which coincided almost perfectly with Wash's nomination, many voices have pointed to Wash as the "main culprit" behind the collapse in precious metals.However, in terms of asset performance, although US stocks experienced some adjustments on Friday, they did not follow the plunge, indicating that expectations of a comprehensive liquidity tightening have yet to form.

The sharp adjustment in precious metals is more due to its own structural factors. The rapid rise at the beginning of the year accumulated a massive amount of profit-taking positions, and any minor disturbance could trigger large-scale profit-taking.Frequent increases in margin requirements by exchanges have directly led to a large number of leveraged funds being forced to close their positions to meet margin calls, creating a mandatory, programmatic cascade of selling that has removed the "ladder" for further price evolution.

As we mentioned earlier, the options market, particularly the frenzied trading of call options, also played a crucial "amplifier" role in the price movement. While the "short squeeze" strategy can create a feedback loop of "option trading driving spot prices" in the short term, it also makes the market structure extremely fragile. Once expectations reverse, the magnitude of the decline could be even more violent.

This plunge seems more like an emotional release and position cleansing using Wash's nomination as a pretext. In the long term, the upward momentum of gold is driven by central banks' ongoing diversified purchases and investors' structural shift from paper assets (such as stocks and bonds) to physical asset allocation—a trend that is far from over.

After Friday's plunge, JPMorgan still issued a report raising its year-end 2026 gold price target to $6,300 per ounce.Although short-term momentum indicators for gold have reached historical extremes, no technical signals indicating a reversal of the long-term bearish trend have emerged. The key support level is around $4,600 per ounce; as long as the market holds this area, the long-term uptrend remains intact.

Unlike gold, silver does not have central banks acting as structural buyers on dips. Therefore, during periods of market headwinds, the risk of a deeper correction than gold in the short term may be greater.

Options strategy

After experiencing "Bloody Friday," $SPDR Gold ETF (GLD.US)$ 、 $iShares Silver Trust (SLV.US)$ The implied volatility is at an extremely high level. This not only means that premiums are expensive and the direct cost of buying options is high, but also implies that the market expects future volatility to remain severe. In this environment, option strategies should focus on risk management and taking advantage of volatility returning to normal.

(1) Playing the gold-silver ratio reversion

During sharp rallies in precious metals, silver, as the second derivative of gold, often sees higher gains than gold. However, if the market moves into consolidation or reverses, the gold-silver ratio typically corrects. Consider constructing a relative value option portfolio: selling out-of-the-money gold call options while buying out-of-the-money silver put options.

(2) Betting on volatility pullback

Precious metals have recently shown extreme price swings with sharp rises and falls. Such extreme movements are not the norm, so positioning for volatility to revert to its usual state can be considered.

Investors may consider using an Iron Condor strategy, which focuses on collecting premiums by simultaneously selling out-of-the-money put options and out-of-the-money call options, while limiting potential risks through buying even further out-of-the-money options, forming a 'limited risk, limited reward' combination.

Compared to short volatility strategies like Short Straddles, which theoretically carry unlimited risk, the Iron Condor caps maximum losses, making it a better choice during volatile market conditions.

(3) Timing entry points for deployment

From a technical perspective, both silver and gold are testing the MA 50 line. Going forward, attention should be paid to whether they can stabilize within this range near key support levels.Sell cash-secured put options(Cash-Secured Put), to collect premium or wait for an opportunity to buy at a discount.

AMD earnings report incoming: Will it validate the CPU shortage narrative?

After market close on February 3 Eastern Time, $Advanced Micro Devices (AMD.US)$ will release its Q4 2025 earnings report. Institutional consensus expects revenue to reach $9.67 billion (up 26% year-over-year and 4% quarter-over-quarter, slightly above the previous guidance of $9.6 billion), with earnings per share at $0.83, representing a 186% increase year-over-year.

Opportunity Analysis

Previously, due to the narrative around server CPU shortages, AMD and $Intel (INTC.US)$ 's stock prices rose accordingly, but the rally was interrupted by Intel's weaker-than-expected earnings report.This earnings report will validate the credibility of the view that server CPUs may follow a similar trajectory as the memory industry.From Intel’s disclosed Q4 earnings report, strong demand for Intel server CPUs directly drove a 15% quarter-over-quarter increase in its DCAI business revenue, but the core constraint lies in insufficient production capacity. Compared to Intel, AMD's server CPUs are fully outsourced to Taiwan Semiconductor (TSM.US) for manufacturing, theoretically facing less capacity pressure, hence the market has high expectations.

Additionally, the market is paying attention to the R&D and mass production progress of the MI400 series AI chips, as well as the company’s collaboration implementation and order visibility with OpenAI, $Oracle (ORCL.US)$ , and major cloud service providers (such as $Microsoft (MSFT.US)$ Microsoft Azure, Google Cloud). Any news about product delays or supply chain issues could trigger market volatility.

Options strategy

As of January 30, the PCR indicator (Put/Call Ratio) for AMD holdings has slightly increased since December, currently standing at 1.12, with bearish sentiment slightly dominating. The absolute implied volatility (IV) is at a relatively high level of 65.19%, historically located at85%Percentile, the options market implies an expected move (EM) on earnings day reaching±8.36%; out of the last eight earnings releases, only twice did the actual stock price volatility slightly exceed market expectations the following day. Based on the open interest distribution of the nearest four option expiration dates, a large number of put options are betting on the$220level, forming short-term support for the stock price, while call options are more evenly distributed across the$250-280range.

If investors are optimistic about the earnings performance and want to find an entry point, they can take advantage of the currently elevated implied volatility (IV) before earnings by usingCash-Secured Put selling cash-secured put options.This strategycapitalizes on 'volatility reversion' for profit. High IV means the sold options come with significant premium; even if the stock price does not fluctuate much, as time passes and sentiment cools, the value of the options will rapidly decline, benefiting the seller.

Assuming an investor sells a put option, if the stock price does not fall below the strike price by expiration, the investor can collect the full option premium without taking delivery. If the stock price plunges below the strike price, the investor must buy the corresponding shares at the strike price, multiplied by the contract size of 100 shares per contract. Therefore, it is essential to remind investors that if they adopt this strategy, it is advisable to proceed with cash collateral to ensure sufficient funds are reserved to handle potential delivery scenarios. If investors wish to minimize the risk of taking delivery, they should consider reducing the time to expiration to avoid more uncertainties, or choose a more out-of-the-money strike price to reduce the likelihood of taking delivery.

Amazon: Bullish ahead of earnings with Cathie Wood increasing holdings, AWS cloud business expected to accelerate sequentially

$Amazon (AMZN.US)$ is set to release its earnings report after the market close on February 5th Eastern Time. Institutional forecasts expect Amazon to achieve revenue of $211.172 billion in Q4 2025, representing a year-over-year increase of 12.45%; expected earnings per share are $1.954, reflecting a year-over-year increase of 5.03%.Notably, Cathie Wood added Amazon shares just before the earnings release, with ARK purchasing 8,088 shares on January 30.

Opportunity Analysis

Investors need to focus on whether the revenue growth of AWS cloud services can continue to accelerate.This is the most crucial factor driving Amazon's current upward valuation, and it has almost become the single overriding metric. The market generally expects its revenue for this quarter to increase by 21.2% year-over-year, continuing to accelerate sequentially.The momentum comes from AI collaborations with Anthropic and OpenAI, the launch of the Trainium3 chip, and the plan to double computing power supply by 2027.

In terms of e-commerce, third-party data combined with Citi credit card spending analysis shows a strong performance during the 2025 holiday online shopping season, with Amazon continuing to capture a significant share of consumer spending.This trend supports robust growth in Amazon's North American retail business.However, we need to closely monitor the potential impact of insufficient inventory due to tariffs on certain products.

Advertising is one of Amazon's highest monetization efficiency businesses. As Amazon’s Authenticated Graph (which integrates user data from Prime membership, retail platforms, and other ecosystems to form a structured map of user identity and behavior relationships, with its core value being the empowerment of precise ad targeting) covers 90% of U.S. households and expands to Prime Video as well as third-party streaming platforms (such as Roku, Disney, and Spotify),its ad inventory and conversion rates are both increasing, which is expected to drive another strong quarter of growth.

Options strategy

Technically, Amazon (AMZN.US) currently showsRange-bound fluctuationsThe overall structure. Prices are hovering near the major moving averages, with trading volume at the recent average level, and most technical indicators showing neutrality. Support is around 228-233, and resistance is around 245-250.

The options market is signalingincreased expected volatility and bullish trading sentimentwith the implied volatility standing at 45.18% as of January 30, which is at a relatively high level over the past year (historical percentile at 90%), indicating that option premiums are expensive. The Put/Call ratio (volume ratio) is 0.43, suggesting bullish market sentiment.

(1) Bull Put Spread

Based on the background of a sideways technical pattern awaiting change + extremely high volatility premium + bullish sentiment, optimistic investors can utilize a bull put spread to short volatility while maintaining a bullish direction. The construction method involves 'selling' out-of-the-money put options at higher prices (to collect substantial premiums) while simultaneously 'buying' lower-priced put options (as a hedge). This strategy is suitable when expecting the market not to fall, whether it moves sideways or surges significantly, we can profit. The current IV Rank at 90% represents a 'favorable environment' for this strategy, where Put premiums are relatively rich, allowing positions to be established during pullbacks, making Puts more expensive and enabling better selling prices.

(2) Single-leg Long Call

Suitable for investors seeking high leverage with low capital before or after events.Starting this week, including Amazon, nine targets now offer Monday and Wednesday expiry options. Options traders, amid high implied volatility leading to expensive option premiums, can effectively reduce the cost of buying options (premiums) by lowering time costs, enabling one-day speculation.

If investors are aggressively bullish on Amazon's earnings reportIt is believed that before the earnings report is released, FOMO (fear of missing out) funds may enter the market to grab shares, potentially pushing the stock price higher. Investors can consider buying a single-leg call option. This week, Amazon has options expiring on February 2, February 4 (the day before the earnings report), and February 6 (the day after the earnings report) available for selection.

In terms of risks, investors should be aware that buying a single-leg option will face significant time decay and volatility decay. Choosing extremely out-of-the-money options carries even higher risks. Additionally, attention should be paid to timely stop-loss measures and securing profits when appropriate.

Brian Wong Huang Zi Zheng

Futu Investment Strategy Expert

CE: BBH085

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Disclaimer

This content does not constitute any offer, solicitation, recommendation, opinion, or guarantee of any securities, financial products, or tools. The risk of loss in buying and selling options can be substantial. In some cases, your losses may exceed the initial margin amount deposited. Even if you set contingent orders, such as 'stop-loss' or 'limit' orders, these may not necessarily prevent losses. Market conditions may make these orders unexecutable. You might be required to deposit additional margin within a short period. If you fail to provide the required amount within the specified time, your open positions may be liquidated. However, you will still be responsible for any account deficit arising from this. Therefore, before trading, you should study and understand options and carefully consider whether such trading suits you based on your financial situation and investment objectives. If you trade options, you should be familiar with the procedures upon exercising options and at expiration, as well as your rights and obligations when exercising options and at expiration.

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