US stocks plummeted last Friday, triggering a frenzy in options trading. Retail investors went against the trend and "bought the dip", setting a historical record.

Affected by the news of Trump's tariffs, US stocks experienced a sharp drop last Friday, igniting the enthusiasm of retail investors to buy the dips. According to data from Cboe Global Markets Inc., the Options Clearing Corporation (OCC) cleared more than 110 million options contracts last Friday, setting a new historical record, surpassing the previous high of 102.6 million contracts set on April 4th this year. This is also the second time in history that daily trading volume has exceeded 100 million contracts. On that day, US stocks plummeted across the board. The S&P 500 index fell by 2.7%, marking the largest one-day decline since April 10th; the Nasdaq Composite index plummeted by 3.6%, showing the worst performance since April 4th; and the Dow Jones Industrial Average dropped by 878.82 points, a decrease of 1.9%, marking the largest one-day decline since May, closing at 45,479.60 points. Analysts pointed out that the catalyst for this market turmoil was President Trump's remarks on the Truth Social platform, threatening to impose 100% tariffs on Chinese imports and considering more trade restriction measures. Cboe data shows that the most popular options contracts on that day included the S&P 500 index and the Nasdaq ETF (QQQ.US). In addition, options trading for individual stocks such as chip manufacturer Wolfspeed (WOLF.US), bitcoin mining company IREN Ltd (IREN.US), and Applied Digital (APLD.US) were also unusually active. According to Citadel Securities trading chief Scott Rubner, despite the significant downturn in the market, retail investors did not flee the market, but instead became the biggest buyers. Rubner stated, "Last Friday was the strongest day for retail investors' buying activity since the 'Meme Stock Frenzy' on January 27, 2021." Rubner's analysis shows that retail investors bought 11% more bullish options contracts than institutions, while bearish options decreased by 23%. This indicates that individual investors are generally betting on a market rebound. Despite the sharp pullback last week, the S&P 500 index has still risen by nearly 30% in the past six months, making it the fifth strongest half-year performance since 1950. Rubner believes this indicates that the market fundamentals are still solid. "Short-term political and trade risks may continue to raise volatility, but from a medium-term perspective, improving corporate earnings fundamentals continue to support the stock market," Rubner said. "As we enter the historically strong seasonal month of November, US stocks may experience a new round of rebound."