Retail traders drive surge in AI option buying to highest level since 2021
Call options purchased on the index comprising the big seven plus AMD, Palantir and Broadcom mark the heaviest ten-day clip observed since the pandemic-era trading frenzy.
Retail investors have stepped up their buying of call options on Cboe's Mag 10 stocks to the highest ten-day rate since the trading frenzy witnessed during the pandemic in 2021. According to a report from the exchange, this surge in activity reflects a renewed aggressive stance from individual traders targeting the technology sector.
The Mag 10 index comprises the big seven technology companies alongside AMD, Palantir, and Broadcom. While the specific composition of the big seven is not detailed in the current data, the inclusion of these three firms alongside major giants underscores the concentration of retail interest in artificial intelligence and semiconductor leaders.
This retail-driven rally coincides with broader institutional momentum in the technology space. Institutions have continued heavy buying of NVIDIA shares amid strong earnings, while Amazon shares rose 31.9 per cent in a single month following a fourth-quarter fiscal 2025 report that beat expectations.
Amazon's latest financials showed revenue increased by 12 per cent year-on-year to $213.4 billion, with operating income reaching $25 billion. The stock has historically gained over 23,545 per cent since 2002, driven by strong investor demand and unusual buy pressure from big money institutions.
The current spike in option volume on the Mag 10 index suggests that optimism regarding AI-related stocks has translated into significant speculative activity. This behaviour mirrors the intensity seen in previous market cycles, with traders positioning for further upside in the sector's leading names.
Market observers note that the concentration of buying in these specific equities highlights a clear preference for high-growth technology firms over other asset classes. The data from Cboe serves as a key indicator of sentiment, suggesting that retail capital remains a potent force in driving the recent super rally.
