Options volume erupted this week in Robinhood and Tesla. The historically worst month for stocks just started. Retail traders responded by buying calls.
This is what passes for strategy in 2024. September arrives. Markets historically tank. The correct move is to load up on bullish bets on the same five tickers that always show up in these headlines. Robinhood itself made the list, which means people are buying options on the platform they're using to buy options. That's not investing. That's a snake eating its own tail while checking its portfolio balance.
Tesla joined the party because of course it did. Retail favorites never change. They just rotate between the same names like a divorced dad's Spotify playlist. Robinhood. Tesla. Maybe GameStop if we're feeling nostalgic. The volume erupted, according to the headline. Erupted. As if this were a geological event and not Kevin from Minneapolis clicking buttons on his lunch break.
September has the worst historical returns of any month. This information is free. It's been true for decades. Retail traders saw this data and decided to express maximum bullishness through the most leveraged instruments available to them. It's like watching someone check the weather, see a tornado warning, and decide that's the perfect time to build a house made of paper.
The options expire worthless in three weeks. The traders will blame market manipulation. They'll post loss porn on Reddit. They'll claim they're still up for the year if you don't count February through August. Then October will arrive and they'll do it again with different tickers, same strategy, same result.
Somewhere a risk management textbook is being used as a coaster for someone's energy drink while they queue up another 0DTE trade on margin.
Photo by Aidan Hancock on Unsplash
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