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Day-Trader Interest in Put Options Adds to Capitulation Fears

  • Retail investors seek protection from more market selloffs
  • Suggests Reddit crowd ‘throwing in the towel,’ Vanda says
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Photographer: Witthaya Prasongsin/Moment/Getty Images

Day traders who populate Reddit’s WallStreetBets forum are increasingly seeking protection from more pain after a selloff rocked the high-flying technology companies and meme stocks preferred by individual investors.

Sentiment on the platform has flipped with more posts and comments focusing on buying put options instead of calls, according to Vanda Research. The increase in mentions of the protective derivatives were also shown in data compiled by alternative markets data aggregator Quiver Quantitative.