Investor risk appetite has surged to its highest level in years, fueling concerns that speculation is once again reaching dangerous extremes in the stock market.
This troubling picture is highlighted by data showing that call options now account for approximately 68% of total options market volume, according to Goldman Sachs figures shared by financial commentary platform The Kobeissi Letter on July 23.
Notably, this is the highest share since 2021 and approaches the all-time peak of around 72% seen during the 2020 to 2021 meme stock frenzy.
By comparison, at the depths of the 2022 bear market, calls made up just 42% of volume, highlighting the dramatic swing back toward aggressive risk-taking.
Meme stocks taking charge
Meme stocks, in particular, are regaining attention, with interest from American investors surging by more than 600% in the past two weeks, according to a Finbold report.
One notable example is Opendoor (NASDAQ: OPEN), where speculative trading has reached unprecedented levels.
In this case, the dollar volume of Opendoor shares traded as a percentage of its market capitalization spiked to a record 298%, nearing the historic 316% peak seen in GameStop (NYSE: GME) during its January 2021 mania.
Another stock caught in the meme stock frenzy is Kohl’s (NYSE: KSS), which, like Opendoor, has experienced a massive short squeeze, triggering sharp price spikes without major fundamental catalysts.
Overall, the resurgence of such speculative behavior suggests that investors are once again gripped by the fear of missing out (FOMO), chasing risky assets with little regard for their underlying fundamentals.
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