There are "standard" conventions in math log regarding the omission of parentheses, based on "precedence" between connectives.
Regarding quantifiers, the omission of parentheses can cause big troubles.
In Herbert Enderton, A Mathematical Introduction to Logic (2nd ed Harcourt - 2001), page 78, we have :
$\lnot$, $\forall$, and $\exists$ apply to as little as possible. For example,
$\forall x \alpha \rightarrow \beta$ is $(\forall x \alpha \rightarrow \beta)$, and not $\forall x (\alpha \rightarrow \beta)$.
According to the above convention, the "correct" reading of your formula is 1).
The same convention is used in :
Stephen Cole Kleene, Mathematical Logic (1967), page 80 : "The quantifiers acts as unary operators in building formulas, and with our other unary operator $\lnot$ are ranked last under the convention for omitting parentheses."
in Dirk van Dalen, Logic and Structure (5th ed - 2013), page 58 : "We agree that quantifiers bind more strongly than binary connectives."
and in :
George Tourlakis, Lectures in Logic and Set Theory. Volume 1 : Mathematical Logic (2003), page 17 : "To minimize the use of brackets in the metanotation we adopt standard priorities of connectives: $\forall$, $\exists$, and $\lnot$ have the highest".
But a good advice is : "do not save ink !"