The Options-Enhanced Stock Market Money Machine Is Going Global
- Explosion in bullish contracts is driven by retail traders
- Rising volume of call options seen whipping up volatility
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Back in January, a bunch of chat-room denizens got it in their heads that they could rev up returns in a stock portfolio by corralling options dealers to their side. It’s starting to seem like they were on to something.
While not new and a long way from risk-free, the strategy celebrated in the Reddit forum r/wallstreetbets is at least fairly simple. Spend some money on bullish calls on shares you own in hopes of forcing the sellers to purchase the same stock as a hedge. An ensuing feedback loop drives everything higher, or so the theory goes.