Retail investors are fueling a new meme-stock mania, driving 6 million daily options contracts in unprofitable small-cap stocks while most of the market barely participates. Fund managers are running almost no cash.

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Appetite for risk is incredibly strong:

Options trading volumes in loss-making Russell 2000 stocks have risen to ~6 million contracts per day, an all-time high.

Volumes have more than doubled since April and surpassed the previous record set during the 2021 meme-stock mania.

By comparison, options activity in profitable stocks is only 33% as large.

Market activity is also becoming more concentrated, with the top 20% of small-cap stocks by options volume now reflecting 75% of small cap options trading.

Most of this activity has been driven by retail investors chasing meme names, 0DTE options, and unprofitable firms.

Retail can’t get enough options.


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