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Options Traders Whipped Up Stock Boom With SoftBank Buying

  • Open interest in FANGs rises at fastest pace in two years
  • Apple, Tesla options more accessible to retail after splits
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It’s a notion that would’ve drawn skepticism in the past: That options buyers could drive extreme rallies in tech companies -- and in turn push benchmark indexes to record highs -- by piling into single-stock contracts. Such side bets, according to conventional wisdom, wouldn’t have enough financial might to move a $30 trillion market.

But after watching call volume explode in Apple Inc., Inc., Facebook Inc. and Tesla Inc. recently, just as the pace of their stock rallies quickened, analysts are starting to embrace the theory. They posit that by acting boldly on a select set of high-flying shares at a time when the professional class is frozen with indecision, traders are able to wield outsize influence. This rush into call contracts, they say, created a bullish feedback loop as dealers were forced to recalibrate hedges.