Yesterday we looked at the CBOE put call ratio since it had gone off the charts. Today it was the retail option traders turn to go crazy:
The ISE sentiment index is a slightly different way of looking at option sentiment since it is primarily focused on smaller option traders and it looks at option activity to open a trade. So by looking at the ratio of the ISE equity only call put ratio we get a much better idea of what retail option traders are doing.
Today they were the most bullish they’ve ever been. According to the intra-day activity, they started this morning with a call buying frenzy that took the ratio to 722 calls for every 100 puts. As the day wore on they calmed down a bit but were still buying more than 400 calls for every put. Then finally when the dust was settled, the daily call put ratio for the day stood at 348 - the highest daily close ever since we have data for this metric. That pushed the 10 day moving average to its highest ever as well: 249.
So option traders are even more bullish than they were in the summer of 2007 as the S&P 500 crested. The only caveat I can muster is that we have a limited amount of data since this data series was started in January 2006.
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