Small options traders have never done this before

The rally in stocks since March 23 has been extremely front-end loaded, with a handful of stocks driving the rally. The lack of continued participation among many stocks has helped some longer-term measures, including surveys like AAII, remain in pessimistic territory. Others, usually shorter-term, are showing more optimism.

Last week, the smallest of options traders, those with trades for 10 contracts or fewer at a time, opened a new record of net bullish positions.

• Bullish options positions: Buying calls and selling puts to open
• Bearish options positions: Selling calls and buying puts to open

When we net out the bullish and bearish positions, we can see those small traders set a new record last week. There is no data we follow that is more worrying than this.

The prior record was February 14, about the peak of the bull market.

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We also looked at:

• What trader options traders are doing, and the spread between large and small, in contracts and $ amount
• What it means when the Bullish Percent Index cycles back to a low level like now
• There has been a surge in 90% up days lately
• Most S&P and Nasdaq stocks are above their 50-day moving averages
• But most are still below their 200-day