MikeM Squared retuiteado
Nobody is talking about what actually happened in the market yesterday.
$2.6 trillion in S&P 500 call options traded in a single day. One day. The highest number ever recorded in market history. The chart goes back to 1999. Nothing comes close.
Here is what that means in plain English. A call option is a bet that prices go higher. When traders buy millions of these bets at once, the market makers who sold those bets are forced to buy the actual stocks to protect themselves. That buying pushes prices up, which makes more people buy calls, which forces more stock buying. The loop feeds itself.
The market goes up not because of fundamentals. It goes up because of pure mechanical force.
60% of all S&P options traded yesterday were calls. Not a normal day. Not even close.
Goldman Sachs had a name for it. Their own traders called it a "semi-irrational chasing mode." That is Wall Street's polite way of saying the market has lost its mind a little.
The Philadelphia Semiconductor Index RSI just hit its highest level since 1999. That was the dot-com peak. Nobody is saying this is 1999. But the market itself is drawing the comparison.
Here is the risk nobody wants to say out loud. When options expire or positions unwind, the mechanical buying stops. And it can reverse just as fast as it started.
The rally is real. The all-time highs are real. But $2.6 trillion in one day tells you this move is running on jet fuel, not fundamentals.
What happens when the tank runs empty?
English
