MW Traders pile into call options as fear of missing out grows, according to Cboe

By Jamie Chisholm

Easing geopolitical concerns turns focus more toward individual stock options amid earnings season

Traders signal offers in the S&P options trading pit at the Cboe Global Markets exchange on March 31, 2026 in Chicago, Illinois. Investors have been diving back into calls.

Investors are chasing the latest stock-market rally by piling into equity call options, according to analysis done by Cboe Global Markets.

A call option gives the buyer the right to purchase an underlying asset at a specified price within a specified period.

In a report published Monday, Mandy Xu, the Cboe's head of derivatives market intelligence, said that when the recent equity rebound began - which saw the S&P 500 SPX bounce 12.3% in just 13 sessions - investors were initially skeptical.

As Cboe highlighted in a report dated April 6, "most of the initial activity was investors fading the rebound by selling calls and resetting hedges," said Xu, referring to a strategy designed to protect positions against the market pulling back again.

"But since April 8th that has changed dramatically," Xu said.

She presented the chart of one-month S&P 500 call option skew, which is a measure of demand for calls. It "has surged from near a 1-year low to now the 90th percentile high on the back of FOMO [fear of missing out]," Xu said.

"Investors caught offside by this sharp rally are increasingly turning to options to reposition their portfolio, with overall SPX [S&P 500] option volumes hitting a record high of 6.7M contracts on Friday," Xu added.

In addition, Xu found that put skew "has fallen to the 15th percentile low over the past year with hedgers largely throwing in the towel."

The bullish activity can also be seen in the S&P 500 put/call ratio which fell below 1 last week. Xu called this "highly unusual" as there typically is more puts trading than calls, and indeed the last time this happened was Nov. 2019, she noted.

And as the risks from the Iran war are believed to be fading, investors are now focusing more on the earnings prospects of individual stocks.

The VIX index VIX tracks expected volatility of the S&P 500, while the VIXEQ index measures expected volatility of the equity benchmark's constituents. The spread between the two gauges shows that traders have started to pay up more for volatility relating to individual stocks relative to the S&P 500 as a whole, a trend that is normal as earnings season moves into gear.

Smaller investors in particular are becoming more keen on the big tech companies as earnings approach. The Cboe's Magnificent 10 index - containing Broadcom $(AVGO)$, Alphabet $(GOOGL)$, Tesla $(TSLA)$, Meta Platforms (META), Microsoft $(MSFT)$, Amazon (AMZN), Apple $(AAPL)$, Nvidia (NVDA), Palantir (PLTR), and Advanced Micro Devices $(AMD)$ - was up over 22% since the end of March, according to Xu.

Xu said there was a notable pickup in retail activity in those stocks, with retail investors making up over 80% of the volume, and zero-day-to-expiry options jumping to 32% of overall volume in April.

-Jamie Chisholm

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April 21, 2026 07:56 ET (11:56 GMT)

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