Options Players Placing Bets Stocks Keep Rising


Traders established fresh Bullish positions last week by buying 35.6-M new Call options on stocks, up from a high of 28.7-M in February, when speculative activity was rampant.

Options traders make big bets on rising prices. This kind of activity could lead to negative returns in the S&P 500 and other indexes over a multi-week to multi-month frame.

Monday’s action in stocks drove the S&P 500 back into the Green for the year as easing lockdowns boosted optimism for an economic rebound. The benchmark closed at a 15-wk high, bringing its rally from the 23 March low to 45%; the NAS 100 rose to a record high and higher on Tuesday.

Small trader Call buying made up more than 50% of total volume last week, the highest since Y 2000,

Tuesday, the major US stock market indexes finished at: DJIA -300.14  to 27272.30, NAS Comp +29.01 at 9953.78, S&P 500 -25.21 to 3207.05

Volume: Trade on the NYSE came in at 1.2-B/shares exchanged

  • NAS Comp +10.9% YTD
  • S&P 500 -0.7% YTD
  • DJIA -4.4% YTD
  • Russell 2000 -9.7% YTD

HeffX-LTN’s overall technical outlook for the major US stock market indexes is Very Bullish in here.

Looking Ahead: Investors will receive the FOMC Rate Decision, the Consumer Price Index for May, and the weekly MBA Mortgage Applications Index Wednesday

Have a healthy day, Keep the Faith!