After 24 S&P 500 Records, Options Traders Running Low on FOMO
- Investors aren’t paying up for further-away call options
- Options dealers are seen buying into any stock market dips
There’s a frenzy-like quality to the rally on Wall Street right now that has many drawing comparisons to the stocks-only-go-up mania of the early days of the pandemic. All major gauges are at or near record highs, fifty-seven stocks in the Nasdaq Composite Index have gained more than 150% already this year, and meme stocks are suddenly, and seemingly randomly, popping once again.
But one key ingredient is missing: Investors aren’t buying derivative contracts that’d give them a shot at a big payday if stocks keep surging. And that lack of demand for call options, as the contracts are known, indicates that beneath the surface there’s a sense among those on Wall Street and in day-trading circles that, unlike the go-go days of 2020, the best of this rally is just about over.