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StocksUpdated×2•Originally published 20 April 2026•Updated 21 April 2026•

1 min read

S&P 500 Options Positioning Reverses as FOMO Drives Market Rally

Key Facts

1Implied volatilities normalized across asset classes as momentum built toward a US-Iran peace deal.

2Initial skepticism from options traders at the end of March has reversed as the market rally continues and FOMO sets in.

S&P 500 options traders have undergone a significant shift in positioning, moving from a skeptical stance to aggressive bullish exposure driven by FOMO. Coinciding with the start of the earnings season, traders' focus has notably shifted toward individual stock options to capitalize on corporate performance. According to Cboe data, there is an increasing influx into call options, signaling growing optimism regarding upcoming earnings reports. This trend follows a normalization of implied volatilities and a stabilization of the VIX, which has led to a reduction in hedging activities. While this shift confirms the recent rally, it underscores a broader change in investor psychology toward risk-taking. Market participants remain focused on whether this transition, now fueled by earnings momentum, can be sustained against potential geopolitical shifts.

about 1 month ago

Version History

Version 2about 1 month ago

What changed: The narrative was expanded to include the shift toward individual stock options driven by the earnings season and Cboe data showing an influx into call options.

Version 1about 1 month ago

What changed: The story was updated to include historical context on extreme pessimism and the impact of recent geopolitical anxiety on investor sentiment prior to the current bullish shift.