Tech stocks have continued to demonstrate resilience despite rising interest rates and growing skepticism about the artificial intelligence sector, particularly following a Financial Times report indicating that OpenAI's revenues are falling short of expectations [1]. On Thursday, the Nasdaq-100 Index declined by as much as 1.8% in response to this news [1]. Concurrently, the options market reflected heightened caution, with the put/call ratio for the Invesco QQQ Trust reaching 1.49—the highest level since late June—signaling that traders are increasingly hedging against a potential pullback [1].
This elevated put/call ratio has been trending higher since August, even as major tech stocks have reached a series of all-time highs through Tuesday [1]. On Wednesday, the two largest options trades were bearish, involving the State Street SPDR S&P 500 ETF Trust (SPY) and Meta Platforms (META) [1]. However, the put/call ratios for SPY and the S&P 500 Index (SPX) remain near their historical averages, suggesting that the heightened caution is more concentrated in tech-focused instruments [1].
During Thursday's regular trading hours, the largest options trades in QQQ were bullish, including a $15 million sale of nearly 5,000 740-strike puts expiring in March and an $8 million purchase of 6,500 835-strike calls, which would require a 14% rally to be profitable [1]. In contrast, after-hours trading saw a shift to bearish sentiment, with a $16 million purchase of 15,000 680-strike puts expiring January 15 and a simultaneous sale of 15,000 760-strike calls expiring October 16, netting a $20 million premium in what was described as the most bearish trade of the day [1].
Market professionals remain uncertain about the implications of these mixed signals. Don Kaufman, co-founder of TheoTrade, noted that neither the bond market nor the OpenAI revenue report caused significant damage, but cautioned that a more sustained selloff would require enough selling pressure to shift the market from absorbing downside to accelerating it [1].
CONCLUSION
Despite a notable increase in bearish options activity and concerns over AI sector revenues, tech stocks have largely maintained their strength. The market remains cautious, with traders hedging against potential declines, but no decisive shift in sentiment has yet materialized. The situation remains fluid, with both bullish and bearish bets reflecting ongoing uncertainty.