Citigroup Data Shows Traders Fully Betting on Nasdaq 100 Index, Believing the Rally Will Continue

According to a report by Golden Finance, on July 3, typically, a 30% rise in the Nasdaq 100 Index over three months would prompt investors to take profits. However, at present, they are betting that this rally is just beginning. The demand for call options on the largest exchange-traded fund tracking the Nasdaq 100 Index is growing faster than the overall market, indicating that capital is rotating into artificial intelligence and growth stocks. Data compiled by Citigroup shows that, based on one metric, the cost of call options on tech stocks relative to the S&P 500 Index is at its highest level since 2007. This trend is not without risks, as concerns are mounting that the artificial intelligence trades dominating the market narrative for most of this year may already be overheated. On Wednesday, the Nasdaq 100 Index fell 1.5%, underperforming the nearly flat S&P 500 Index at the close, and on Thursday, the index again lagged behind the broader market. Brent Kochuba, founder of the options platform Spot Gamma, commented on the call options for tech stocks, stating: 'Traders are currently in an extremely bullish state.'