Options traders piled into bullish bets on megacap growth stocks like Nvidia Corp. at a record pace this week, surpassing the previous pandemic-era peak.
On average, trading in bullish call contracts exceeded bearish puts by roughly 4.5 million contracts during the five days through Friday, according to data from the Options Clearing Corp. shared by Deutsche Bank in a Friday research note.
DEUTSCHE BANK
The frenzied options trading was part of a broader shift in investor positioning as traders increasingly favor technology stocks, particularly megacap names like Nvidia
NVDA,
and Apple Inc.
AAPL,
Technology funds saw record inflows in the week that ended Wednesday.
Megacap growth stocks — including some outside the technology sector, like Eli Lilly & Co.
LLY,
— have driven most of the S&P 500’s
SPX
rise to record highs in 2024, leaving some investors worried that the market might be growing too dependent on a handful of companies.
Calls tied to Nvidia were the most popular options ahead of Friday’s June “triple witching” expiration, even surpassing activity in contracts tied to the S&P 500 and a popular ETF
SPY
that tracks the benchmark index, according to SpotGamma data.
See: Nvidia’s rally faces latest test in Friday’s record-setting ‘triple witching’ options expiration
Nvidia alone had accounted for roughly one-third of the S&P 500’s advance in June before Thursday’s selloff, according to FactSet data. The S&P 500’s information-technology sector
XX:SP500.45
is up nearly 10% so far in June, while Nvidia has risen more than 15%, to $126.57 as of Friday’s close. Earlier this month, the chip designer completed a 10-for-1 stock split, which seemed to boost investor interest in the stock.
The S&P 500, by comparison, has gained 3.6% this month and finished at 5,464 on Friday.
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