AI super rally has retail investors acting the most aggressive since trading frenzy during Covid
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- Cboe reports that retail traders' call buying in its "Mag 10" stocks hit the heaviest 10‑day level since 2021, with 52% of new positions being calls and 17% being call‑selling.
- Nations Indexes says out‑of‑the‑money Nasdaq‑100 call contracts are at a 52‑week high and near a three‑year record, while covered‑call selling is scarce.
- Robinhood Markets data shows traders net buying tech giants such as Nvidia, Tesla, AMD and Microsoft, while shorting laggards like Costco, UnitedHealth and Alibaba.
- Mandy Xu, head of derivatives market intelligence at Cboe, states hedgers have “thrown in the towel,” reflecting a shift from risk‑mitigation to aggressive bullish bets.
- Scott Nations, president of Nations Indexes, notes that the lack of covered‑call sellers signals “a whole other level of bullishness.”
Why it matters: Retail traders could reap big gains if the tech rally sustains, while hedgers lose premium income; soaring call prices and scarce covered‑call supply raise options costs and boost volatility for those seeking downside protection.
