Options traders are buying calls on stocks that haven't made new highs. They're convinced the highs are coming. This is the financial equivalent of ordering champagne before your Hinge date shows up.
The logic works like this: Stock hasn't broken out. Chart looks ready. Buy options. Wait for breakout. Collect money. It's foolproof except for the part where the stock needs to actually go up, which apparently is now optional in modern technical analysis.
These aren't diversified positions across sectors with thoughtful delta hedging. These are lottery tickets. Someone looked at a chart, saw a line that was close to another line, and decided that was worth risking actual money. The gap between the current price and the all-time high might as well be the Marianas Trench, but sure, load up on weekly calls.
The beautiful part is the self-assurance. No new highs yet? No problem. The highs are coming because the options activity says they're coming. The options activity exists because traders think the highs are coming. It's a perfect circle of reasoning that would make a philosophy professor weep.
You know what else shows up in unusual options activity? Wrong bets. Thousands of them. Every single day. But those don't make headlines because "Options Traders Lose Money on Directional Bets They Made Up" doesn't generate clicks.
The real tell is the phrase "around the corner." Not tomorrow. Not next week. Around the corner. Could be a month. Could be never. The corner is wherever you need it to be to keep the dream alive.
Somewhere right now a retail trader is looking at this options flow, nodding along, thinking he's finally getting the inside scoop. He's about to buy calls on a stock trading sideways for six months because someone else already did. By the time he figures out the corner was actually a cul-de-sac, his account will be smaller and his conviction will be stronger.
Photo by Tyler Prahm on Unsplash
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