Retail Investors Go All-In on AI Stocks at Most Aggressive Pace Since Covid Era

CNBC reported Tuesday that retail investors are now snapping up call options on major AI and tech stocks at a pace unseen since the Covid-era stimulus frenzy of 2021.

Retail Investors Flood Into AI Call Options

Exchange operator Cboe tracks what it calls the “Mag 10” basket. That group includes the original Magnificent Seven plus AMD, Palantir, and Broadcom. Over the past 10 trading days, retail call-buying in those names has reached its highest intensity since 2021. Of all new positions opened, 52% were outright call purchases. Just 17% involved call-selling.

Cboe’s head of derivatives market intelligence, Mandy Xu, told CNBC the shift reflects a clear capitulation by cautious traders. Xu said hedgers have abandoned defensive positioning and are now chasing upside through calls. The reversal is striking given that the same metric sat roughly 15 percentage points lower just one month ago.

A Sharp Turn From April Anxiety

Only weeks ago, investors were focused on geopolitical tensions and crude oil price volatility. That defensive posture has unwound rapidly as tech stocks extended their surge. The Nasdaq-100 set a fresh all-time high on Monday and is now up more than 16% year-to-date. Semiconductor stocks have led the charge, approaching 20% of the S&P 500’s total market capitalisation.

Nations Indexes president Scott Nations told CNBC that one-standard-deviation out-of-the-money calls on the Nasdaq-100 have reached a 52-week high in price and are near a three-year record. Nations noted that the more telling signal is the near-total absence of covered call sellers. That reluctance to cap upside, he said, indicates an unusually deep conviction in further gains.

Single-Stock Bets Dominate as Correlations Stay Low

The narrow character of the rally is shaping how traders deploy capital. Because gains remain concentrated in a handful of names rather than the broad market, options activity has shifted heavily toward individual stocks rather than index products. The ratio of single-stock volatility to the VIX has stretched to the 98th percentile, Cboe data shows.

Retail platform Robinhood Markets confirms the pattern. Its most-traded names include Nvidia, Tesla, Micron, AMD, and Microsoft. Chief brokerage officer Steve Quirk told CNBC that Robinhood users have long held conviction in tech and innovation and consistently add to those positions on dips.

The dynamic echoes the post-lockdown period when stimulus cash and zero interest rates fuelled a speculative wave. This time the catalyst is artificial intelligence rather than reopening optimism, but the options market’s posture looks remarkably familiar.

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