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Is Options Trading Fueling Stock Market Bubble?

edited January 2021 in Other Investing
"Options trading hit a record in 2020, with some 7.47 billion contracts traded, according to the Options Clearing Corporation. That was 45 percent higher than the previous record, set in 2018."

"Much of this money has come from small-time traders hoping to make fast gains by buying 'calls' — bets on rising markets — set to expire quickly."

"The skew is evident in something called the put-call ratio, which shows how many contracts are betting on gains compared with those betting on losses through 'put' options. On Friday, the 50-day moving average of that ratio was 0.42, near the lowest level in two decades."

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