Options traders stormed into tech trades Thursday. Stormed. Like they'd just heard the Costco food court was closing. Rushed in with the confidence of men who've confused a chart pattern with a personality.
The AI trade rebounded. Nobody knows why. The same people who couldn't explain why it fell now can't explain why it rose. But they bought calls anyway because that's what you do when you mistake momentum for intelligence.
Unusually bullish activity, the headline says. As opposed to the usual bullish activity where traders lose money at a respectable pace. This was different. They lost it faster. With conviction.
Tech stocks went up so traders bought options that would profit if tech stocks kept going up. Groundbreaking stuff. Real cutting-edge strategy. Buy the thing after it already moved. Wait for it to move more. Complain on Reddit when it doesn't.
The flurry happened Thursday. Not Wednesday. Not Friday. Thursday. Because apparently that's when the group chat reached critical mass and everyone decided this was the moment. The exact moment to pile into premium with implied volatility already jacked to the moon.
These are the same people who'll be selling those calls Monday for a seventy percent loss and posting "what happened" in r/options like they're the first person to discover time decay. They're not. Time decay has been discovering them for years.
The rebound sparked the activity. Sparked. Like tech stocks rising three percent is the financial equivalent of the shot heard round the world. Like anyone will remember this by next week when the trade reverses and those same bullish options expire worthless in accounts that should've stuck with index funds.
But sure. Storm into tech. Chase the move. Buy high. Sell never because you'll hold until expiration hoping for a miracle that understands neither Greeks nor mercy.
Photo by Maxim Hopman on Unsplash
Leave a Comment