Contrarian Moves: Retail Traders Intensify Market Crash Bets As Put Option Activity Surges
Portfolio Pulse from Piero Cingari
Despite a bullish trend in major equity indices, retail traders are showing signs of caution and betting against the market rally. The SPDR S&P 500 ETF Trust (SPY) and the Invesco QQQ Trust (QQQ) recorded gains of 4% and 5% respectively in the first week of November. However, almost one-third of the options on the S&P 500 index purchased in the past week were bearish bets, indicating a lack of confidence in the current rally. The ratio of put option buying to total option buying by retail traders reached 31% last week, one of the highest recorded over the past 24 years.
November 07, 2023 | 4:48 pm
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NEGATIVE IMPACT
Despite the QQQ's 5% rally in the first week of November, retail traders are showing caution and betting against the market rally, which could potentially impact the ETF's short-term performance.
The bearish bets by retail traders, despite the recent gains, indicate a lack of confidence in the current rally. This could potentially lead to increased selling pressure on the QQQ, impacting its short-term performance.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
Despite the SPY's 4% gain in the first week of November, retail traders are showing caution and betting against the market rally, which could potentially impact the ETF's short-term performance.
The bearish bets by retail traders, despite the recent gains, indicate a lack of confidence in the current rally. This could potentially lead to increased selling pressure on the SPY, impacting its short-term performance.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80