US retail investors have begun to “explode” in bearish options, but the underlying bullish formation is not chaotic

Comparing news, since April of this year, there has been a fundamental reversal in the behavior pattern of retail investors in the US stock market. According to data from research firm Vanda Research, although total direct stock purchases showed a downward trend this year, retail purchases of put options are bucking the trend and surging. According to the data, buying volume of put options for the 12 most popular stocks favored by retail investors in 2026 almost doubled compared to the first quarter. As a basic defensive derivative, a put option gives the holder the right to sell the corresponding asset at a predetermined price before a specific date.

Kaidi Meng, a global equity strategist at Vanda, confirmed this dramatic shift in funding. She pointed out that the purchase volume of such options as a share of net cash purchases (that is, the difference between buying and selling assets) has soared sharply from about 26% to 110%. In response to widespread cuts in long positions, industry analysts believe this may be the end of retail investors' concentrated profits after years of successfully adopting the “buy on dips” strategy. Furthermore, some of the withdrawn funds may have chosen to take on a more intense risk game through speculative stocks, leveraged ETFs, and predictive markets. (CNBC)