The derivatives market boomed during the pandemic and continues to grow. With an average of 40 million contracts changing hands daily in 2022, options trading is “a crucial area to watch during the current selloff.”

Following the trends in the types of options being traded shows how much investor sentiment has changed.

2021 was Euphoric

For all but one trading session last year, call options activity outpaced bearish put options trading.

2022 the Bears are in the House

This year, there have been more than two dozen trading sessions in which trading in puts has outpaced calls (source: CBOE Global Markets). Put options volume across all U.S. listed symbols hit an all-time high going back to 2008.

Even $TSLA with its cultish following of call buyers hit a new record of put buyers last week.

Shifting towards index investing

With the current concern surrounding the broader markets and economy, investors are showing less interest in trading options tied to individual stocks and looking more towards index options.

Source: WSJ