Analyst: FOMO sentiment is driving call option buying activity for the S&P 500 index.
58 minutes ago
Traders are showing strong demand for options betting on further gains in the S&P 500. On Tuesday, call option contracts tied to the benchmark index saw trading volume exceed 4 million, hitting an all-time high, while put option volume remained in line with average levels. Jason Coogan, a trader at Simplex Trading, noted that over the two days leading up to Tuesday, the market saw a "one-way inflow of orders". Analyst Tanvir Sandhu said: "The options market is reflecting investors' FOMO (fear of missing out on upside moves). Investors are now more worried about missing the next rally than protecting against a market pullback, a trend reflected in a sharp shift in option skew. Even as stocks continue to rise, strong demand for call options is keeping implied volatility elevated." (Source: Jin10)
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