Tech Traders Say Options Hedging Is Firing Up Rally in Nasdaq
- Some see the options market stoking demand for FAANG shares
- The Nasdaq VIX has risen on up days, usually an anomaly
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Wrinkles in the relationship between stock and options markets have a few Wall Street sleuths claiming to have unearthed clues to the storm raging in technology shares over the last few weeks.
They point to recent days when implied volatility on the S&P 500 and Nasdaq 100 rose even as equities rallied -- a rare alignment that is out of step with historical patterns. One theory is that an explosion in demand for call options to bet on megacap tech is feeding into gains in the stocks as dealers hedge.