Day-Trader interest in put options raises capitulation concerns

US consumer protection agency adds stress on banks over fees

“For the first time since the pandemic started, mentions to put options have overtaken references to calls,” according to Ben Onatibia and Giacomo Pierantoni of VandaTrack Research. That suggests “the Reddit crowd is indeed throwing in the towel.”

Day traders who populate Reddit’s WallStreetBets gathering are increasingly looking for protection from more pain after a selloff shook the high-flying technology organizations and meme stocks liked by individual investors. Sentiment on the platform has flipped with more posts and remarks focusing in on purchasing put choices rather than calls, as indicated by Vanda Research. The increment in notices of the defensive subsidiaries were additionally displayed in data compiled by alternative markets data aggregator Quiver Quantitative.

The souring sentiment is another sign individual investors who have had a rough start to the year are seeking protection, with favorites like Tesla Inc. down more than 10% and Nvidia Corp. shedding a fifth of its value. The S&P 500 Index, lower by 7.7%, is on pace for its worst month since the pandemic hit in March 2020.

WallStreetBets users’ mentions of puts on the world’s largest exchange-traded fund, the SPDR S&P 500 ETF Trust (ticker SPY), have blown past touts of trading call options, according to data compiled by Quiver Quantitative. The same is apparent for Tesla and Netflix Inc.

The anxiety for retail investors who may be experiencing their first correction contrasts with trends seen for Wall Street pros. Put open interest in the SPY has plunged to the lowest since 2014, signaling a dramatic drop in demand for protection by the overall market.

Wednesday’s market rebound may be a sign hedge funds are right as the S&P 500 jumped as much as 2%, while the Nasdaq 100 outperformed major benchmarks.

Even so, Vanda argues that the combination of rising interest in put options as well as retail investors’ waning demand to snap up risky assets like meme stocks and special-purpose acquisition companies signals “retail capitulation may not be that distant after all.”

Disclaimer: If you need to edit or update this news from compsmag then kindly contact us Learn more

For Latest News Follow us on Google News


Latest Headlines
  • Show all
  • Trending News
  • Popular By week
The Huawei P50 Pro 5G cover is now officially available and is expected to provide eSIM functionality to the smartphone for around $120
The Huawei P50 Pro 5G cover is now officially available and is expected to provide eSIM functionality to the smartphone for around $120
5G Accessory Chinese Tech Leaks / Rumors Smartphone Phablet Gadget. The Huawei P50 Pro is a flagship-grade device, albeit one that has launched with versions ...
One in six killed by pollution worldwide, according to study
One in six killed by pollution worldwide, according to study
“The health impacts of pollution remain enormous, and low- and middle-income countries bear the brunt of this burden,” said Richard Fuller, the study’s lead ...
ACSI data shows Consumer Cellular leads in customer satisfaction among mobile operators, while Apple benefits from Samsung's blunder in the mobile market
ACSI data shows Consumer Cellular leads in customer satisfaction among mobile operators, while Apple benefits from Samsung’s blunder in the mobile market
“The industry’s overall stability was a bit surprising last year, but now we’re beginning to see the effects of consumers’ widespread dependence on wireless, ...
In a recent labor council document, Apple is accused of attacking unions
In a recent labor council document, Apple is accused of attacking unions
The Cumberland store is one of three retail locations where workers have launched official union drives. Many more are in the process of organizing. Apple ...
505 Games and The Bearded Ladies have announced the release of Miasma Chronicles, a tactical adventure game for the PlayStation 5, Xbox One, and PC
505 Games and The Bearded Ladies have announced the release of Miasma Chronicles, a tactical adventure game for the PlayStation 5, Xbox One, and PC
Meet Elvis, a young man brought to the mining town of Sedentary as a baby. Left by his mother in the care of a robotic older “brother” and given a mysterious ...
HP updated its Omen 16 gaming laptop with better cooling
HP updated its Omen 16 gaming laptop with better cooling
A Dynamic Power feature in the Omen Gaming Hub can help with that as well. HP says that, using a built-in IR thermopile sensor, it can monitor CPU and GPU ...
Apple Car can have VR Technology but no windows
Apple Car can have VR Technology but no windows
On May 3rd, 2022, Apple filed a patent with the United States Patent & Trademark Office for an in-car VR entertainment system that utilizes the motion of ...
Inflation in the UK has reached 9%, the highest level since 1982
Inflation in the UK has reached 9%, the highest level since 1982
According to the Office for National Statistics, consumer price inflation exceeded 9% in April, surpassing even the highs of the early 1990s recession, which ...
The stock market rally flopped as UK inflation hit a 40-year high
The stock market rally flopped as UK inflation hit a 40-year high
Many analysts have characterized this week’s sharp rally as a short-term bounce of the sort common during a lengthier downward trend for equities. Few are ...
India is best placed to deal with global problems and uncertainties
India is best placed to deal with global problems and uncertainties
India, he said, has already taken a host of reforms in banking and other sectors and is now focussing on stepping up public investment. ”Compared to other ...
Show next
We will be happy to hear your thoughts

Leave a reply

Compsmag - Latest News In Tech and Business
Logo