The chart you’re looking at shows how lopsided the options market has become. On Wednesday, calls made up 65% of all options traded. That’s about as high as it gets and basically tells us traders are loading up on bets that stocks will keep climbing. Instead of hedging against risk, most people are chasing the upside.
Why does this happen? Big moves like this usually follow waves of excitement. When traders see momentum, especially short-term, they often don’t want to be left behind. Calls give them a cheap way to control a lot of stock, so the payoff looks huge if the market keeps rising. In other words, it’s fear of missing out turned into a trading strategy.But there’s a double edge to this. When call buying explodes, the market can become fragile. Calls are leveraged contracts, so if the rally stalls, all those bets can suddenly look bad. Dealers who sold the calls often hedge their risk by buying or selling stock. If prices start slipping, they may dump shares to stay balanced, which can make drops sharper and faster. That means the same energy that pushes stocks up can also make reversals painful.This behavior also says something about psychology. When calls dominate like this, it’s less about careful investing and more about speculation. The crowd is focused on quick wins, not protection. That can create a loop where rallies feed themselves for a while, but the safety net is thin. If any bad news or disappointment hits, the unwind can be violent because hardly anyone is holding puts or downside insurance.Source: StockMarket.News
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