Further to my recent comments in the Changing Tides thread.

I want to draw particular attention to something unusual.

cnbc.com - Powells speech triggered record options bets topping even the meme stock frenzy

"A speculative frenzy after Fed Chairman Jerome Powell spoke last week helped drive record trading in call options Thursday, and there could be more Powell-related options action Tuesday as investors await his midday speech."

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Now this is interesting in several ways.

- More intense than meme frenzy in 2021?? Good grief.

- I know many young adults who trade options and they almost never exercise. They're selling them back. They try to get as much gearing as they can on each bet.

- That means a lot of MM buying in the underlying stock (when call is bought) and a lot of MM selling (when call is sold back) to hedge against the underlying.

- It seems to me that this short-term call buying frenzy has the potential to exaggerate, then rapidly flatten/reverse, a rally.

- I personally suspect it has led to a false signal in Jan/Feb 2023 for the TA people looking for a 'breakout' and 'broad buying'. As a result of a small fraction of investors generating a huge volume of buy activity via short-term calls and massive leverage, that have the appearance of 'a broad buy-in / beginning of bull market'. Remember, more than half of all options trading is now extremely short-term and this is very different to how the options market functioned prior to 2022.

lux