Why "Speculative Trading" is on the rise in 2025 Retail traders are using speculative trades at a rate we haven't seen since 2021. Several factors are contributing to a rise. There's a volatile political climate from tariff trade wars. Plus an emergence of quantum computing tech to power AI, and the rise of short squeezes from heavily shorted companies. Factor in a record high on the S&P 500 and retail traders appetite for risk is growing. In May 2025 alone, speculative ODTE options trades (these are options that expire in the same day) made up 61% of all SPX options trading - a new high. With retail responsible for 54% of that volume. Total U.S. options volume also more than doubled from 5 billion contracts in 2019 to 10 billion contracts in 2023. It's on track to break new records with 11.4 billion contracts. Overall, trading is now less about investing and more about quick trades with big potential payoffs. Retail traders becoming a major force for driving volatility But speculative trading isn't just about gambling on the next hot AI stock, retail traders are now affecting the overall market sentiment. Earnings reports are one area that retail traders are looking at more. As you'll see above, recent data from Bespoke Investment Group saw the typical (over) reaction to earnings reports has been trending the highest since the financial crisis of 2008. Overall, retail traders are rushing into names that tend to have a big impact on the overall market when earnings come up. Think names like Nvidia (NVDA), Reddit (RDDT) and Tesla (TSLA). As retailers pour in at higher rates, it creates massive swing trade opportunities as prices overshoot in both directions. YOUR ACTION PLAN Overall, the rise is speculative trading is creating off-the-charts buy opportunities - especially around key events like earnings. Next week I'm revealing a special trade strategy that I believe is PERFECT for these current buy trends. It's part of my "10X Lotto Trade Summit," which starts next Wednesday at 2 p.m. ET. I've never shared this strategy outside of Daily Profits Live before, so I'm excited to share it with you for FREE next week. Click here to sign up for the "10X Lotto Trade Summit." |
No comments:
Post a Comment