Silverman: Options traders are positioned differently around AI stocks this quarter

I just kind of want to get your take. What we just showed you are we talked about that data point from Trade Alert potentially a nine percent swing $200 billion in market cap. You're talking to a lot of investors I'm sure are they preparing for that possible move and and what steps are they taking? Look, they absolutely are. I think you know although we've seen better breadth in the market, Frank, we kind of all know if tech goes, the market goes and look all eyes are on NVIDIA because of that concentration and also because of what it means for that AI wave. the Super interesting thing is that the way options investors are positioned right now is very different than past cycles where they simply were long called. We don't see as much of that. We actually see it as much more even. And you just don't see that exuberant bullish sentiment that you saw in past earning cycles that really kicked off that AI frenzy. Really. That's interesting. You know, I think of you like the Oracle of options. So if that's what you're saying, wow, that's, that's crazy. So, Amy, how do you see today shaping up as we await this big report from NVIDIA? What's your WEX word of the day? So look my wax word of the day is anticipation, anticipation first of the Fed speak that's going on but also of NVIDIA tomorrow. I think what's going to be happening in the next few days is investors are really going to be pre positioning. Part of it is because we've just simply seen on a market structure level Frank, that people are just positioning shorter and shorter. You know you see that with the rise of 0 day to expert options. But I think a lot of people are going to be putting on these trades both for the Fed speak as well As for NVIDIA today and tomorrow. And so you could even larger swings as we head into those events. No, I know what else. I want to talk to you about opportunity cost. So normally when we talk about opportunity cost is what you're missing out on. But right now there's actually an opportunity to protect yourself from wild swings in the options market and the cost is so low. What does that tell us? Yeah, you know, it's I, I've started to go around saying that options protection is laughably inexpensive. You know, we're really we we go down to historical lows and actually they go down even more, you know, our volatility of volatility. So the volatility, the VIX itself actually crashed to the lowest levels we've seen recently and we continue to trade it you know kind of sub 13 handles on that VIX number. I think what it tells you is that the truth is the last few geopolitical events we've had have unfortunately been nothing burgers from a market perspective. The market just simply ignored it and I think that short term memory is fresh in investors minds even though obviously there are points in time like 87 or O8 we could point to, they just happened a long time ago. All right. So people are, they sound like a little bit complacent. Is there any area of the market right now where you're seeing higher than normal options activity? It's interesting. One big disconnect we talked about is this idea of dispersion, Frank. So the idea that index level volatility is really, really, really, really low. But actually you see a lot of the activity on the single stocks. One, I think that's just because it's a very concentrated threat market. But two, a lot of technical factors are dampening the index level. Now if we get some sort of correlated move Frank, either because of US elections or because of the geopolitical event, it will move the index level and that part I think is complacent and that part I think people are under protected on. I got to ask you, I mean you have so much you know just experience with all this with markets trading at all time highs, what you're seeing in the options market, just what you're hearing from clients. Is this abnormal, is it concerning? I mean how would you just phrase it? I would say that the post COVID world has been very different from a volatility regime perspective and a lot of relationships that we had come to expect. So the idea that if spot prices go up, volatility goes down has not been holding, that's partly been, you know, not the fault, but the the reason is because of AI exuberance. We've seen the chase and the momentum. But when that factor starts to change, when the market is no longer on FOMO, because frankly everyone is long Frank, everyone's jumped in the pool, then I do think we risk the other side becoming more relevant.