U.S. retail investors have begun aggressively buying put options, but the underlying bullish structure remains intact

According to Odaily, since April this year, the behavioral patterns of retail investors in the U.S. stock market have undergone a fundamental reversal. Data from research firm Vanda Research shows that despite a declining trend in direct stock purchases this year, retail buying of put options has surged against the trend. The data reveals that put option purchases targeting the 12 most favored hot stocks among retail investors in 2026 have nearly doubled compared to the first quarter. Put options, as a basic defensive derivative, grant holders the right to sell the underlying asset at a predetermined price before a specified date.

Kaidi Meng, global equity strategist at Vanda, confirmed this significant capital shift. She pointed out that the purchase volume of such options as a proportion of net cash buying (the difference between spending on purchases and sales of assets) has surged dramatically from approximately 26% to 110%. Regarding the widespread reduction in long positions, industry analysts believe this may represent concentrated profit-taking by retail investors after years of successfully employing the "buy-the-dip" strategy. Additionally, some withdrawn capital may have chosen to take on higher-intensity risk through speculative stocks, leveraged ETFs, and prediction markets.