Daily Single-Stock Options Trading Hits $700 Billion
Retail investors have driven daily single-stock options trading to $700 billion, mirroring the 2021 meme-stock mania amid optimism over artificial intelligence and corporate earnings.
Daily trading volumes in single-stock options have surged to approximately $700 billion, reaching levels comparable to the 2021 meme-stock mania. This activity is characterized by high-risk strategies, with more than half of the volume concentrated in contracts expiring in less than two weeks.
Carrick Lane LLC reported the surge in notional volume, which is driven by strong corporate earnings and optimism surrounding artificial intelligence. This bullishness has led retail traders to overlook economic headwinds, including $100 oil prices, rising interest rates, and conflict in the Middle East. FactSet projected S&P 500 earnings growth of about 30% for the third quarter, further fueling the trend.
Sentiment data from the American Association of Individual Investors shows bullishness reached 40.3% for the week ending October 7, the highest level since mid-July. While many investors are targeting high-conviction megacap tech names, data from the Charles Schwab Corporation indicates some traders are adopting a more cautious approach by shifting toward dividend-tracking ETFs and related call options.
