Retail investors have turned aggressively bullish on AI stocks, buying call options on Cboe's 'Mag 10' basket at the heaviest 10-day clip since 2021, according to a report from the exchange. The move echoes the trading frenzy seen during the Covid-era meme-stock mania.
The group — which includes the so-called Magnificent Seven plus AMD, Palantir and Broadcom — represents the core of the AI-driven market rally. The surge in call buying suggests individual traders are betting on continued upside in these high-flying names.
Cboe's data tracks the 10-day average of call volume relative to put volume among retail accounts. The ratio hit levels last seen during the peak of retail euphoria in early 2021, when GameStop and AMC captured global attention.
This aggressive positioning raises questions about whether retail exuberance is a contrarian signal. Some analysts warn that such concentrated bullishness can precede sharp pullbacks, particularly when enthusiasm is focused on a narrow set of mega-cap tech stocks.
Critics note that retail traders tend to chase momentum, which can amplify downside risks. The current fervor may be a sign of froth rather than a sustainable trend.