AI super rally has retail investors acting the most aggressive since trading frenzy during Covid

• Of new options positions in 'Mag 10' stocks (big seven tech plus Alibaba, Berkshire, Eli Lilly), 52% were call-buying and only 17% were call-selling, marking a sharp reversal from just one month ago when the metric was 15 points lower
• Call option prices on the Nasdaq-100 that are one standard deviation out of the money have reached a 52-week high and near three-year record levels, signaling extreme bullishness
• Traders are concentrating bets on individual tech stocks rather than indexes, with Robinhood's most-traded names including Nvidia, Tesla, Micron, AMD and Microsoft, while selling laggards

Market Summary: Retail Investors Show Aggressive Bullishness Amid AI Rally

Key Developments

Retail traders are exhibiting their most aggressive bullish behavior since the COVID-era trading frenzy of 2021, according to Cboe exchange data. The surge in optimism is driven by an extraordinary rally in AI and technology stocks.

Critical Data Points

• Call buying intensity: 52% of new positions in Cboe's "Mag 10" stocks (the Magnificent Seven plus Alibaba, Uber, and Booking.com) are call purchases, with only 17% call-selling
• Nasdaq-100 performance: Set new record on May 11, 2026, up over 16% year-to-date
• Semiconductor weighting: Chip stocks now represent nearly 20% of S&P 500 market capitalization
• Options pricing: Call contracts one standard deviation out-of-the-money reached 52-week highs, approaching three-year records
• Volatility metrics: The VIXEQ to VIX ratio has widened to the 98th percentile due to low correlations

Market Behavior

This represents a dramatic reversal from just one month ago, when the call-buying metric was 15 points lower and investors focused on geopolitical concerns and oil prices. Mandy Xu of Cboe noted that "hedgers have thrown in the towel" as traders rush to catch up to the rally.

Trading Activity

Robinhood data reveals retail traders are actively buying tech giants including Nvidia, Tesla, Micron, AMD, and Microsoft on market dips, while selling underperforming names. Single-stock options trading has outpaced index trading, keeping individual stock volatility elevated despite the broader rally.

The concentration and intensity of bullish positioning signals heightened speculative appetite not seen since the pandemic-era stimulus-driven market surge.