everyone wants a piece of the new bull market traders are piling into bullish options bets that would profit if the recent stock rally continues there has been a flurry of trading tied to continued advances in everything from artificialintelligence stocks to smaller economically sensitive companies and regional banks the activity suggests the dour outlook with which many investors began the year has softened as the sp 500 has rallied 13 the techheavy nasdaq composite has soared 29 in 2023 on track for its best start to a year since 1983 bullish bets on artificial intelligence have boomed more than 13 million call contracts on chip makers nvidia nvda 190decrease red down pointing triangle  intel intc 089increase green up pointing triangle and advanced micro devices amd 062decrease red down pointing triangle changed hands on an average day in june on track for the highest monthly total on record those volumes surpass the exuberance seen in november 2021 when the nasdaq composite reached its peak trading activity has more than doubled since the start of the year cboe global markets cboe 151decrease red down pointing triangle data show calls give the right to buy shares at a specific price by a specific date puts confer the right to sell there has also been record activity tied to sp 500 index options with oneday trading in calls surging according to cboe global markets data the elevated trading has pushed up prices of such call options to extreme levels a sign of ebullience “fear of missing out is back” said stephen solaka a managing partner at belmont capital group which oversees optionsbased strategies in the coming days traders will parse data on consumer confidence and inflation to gauge the health of the economy and forecast the trajectory of the market to be sure some of the recent market fervor moderated last week when federal reserve officials reiterated their commitment to keep raising interest rates—and worries about commercial real estate began to build the sp 500 fell 14 snapping a fiveweek winning streak still the rally to kick off 2023 caught traders flatfooted and burned those who bet against the market many of those investors say the us economy has held up much better than they expected and the jobs market has been less sensitive to rising interest rates than anticipated now even those who previously took a more cautious stance say they simply don’t want to miss out on the potential for big gains ahead “i think the recession got delayed” said zhiwei ren a portfolio manager at penn mutual asset management ren said he has been bearish on the us stock market for much of the year but in recent weeks decided to ride the momentum in the sp 500 higher via index call options that helped him notch quick profits from the ascent in stocks so far that fear of missing out has created a wide gap between the market’s winners and losers though there are signs that is starting to turn by one measure the current stockmarket rally has been its most narrow since the dotcom bubble in 2000 with a handful of tech stocks driving the returns according to goldman sachs group buzz about artificial intelligence has hit a fever pitch shares of amazon and mongodb recorded large oneday pops on thursday for example as the companies made announcements regarding ai the excitement in the options market has sent skew—an optionsbased measure of pessimism versus optimism—to some of its lowest levels since at least 2019 that qualifies as a sign that traders are loading up on calls rather than puts “a lot of people are coming around to the view that the stock market may have already bottomed last fall” said amy wu silverman rbc capital markets’ head of derivatives strategy the enthusiasm has started spreading to other corners of the market a sign some traders are positioning for this year’s laggards to catch up to hot tech stocks for example there has been a jump in call demand tied to small caps which have underperformed in recent months investors are also pouring money into smallcap funds many of which are dominated by shares of regional banks and other stocks that are sensitive to the health of us consumers ten of the 11 sectors in the sp 500 have risen in june referring to the flurry of tech options trading brent kochuba founder of derivativesdata firm spotgamma said “the signal you would expect to see before a blowup is a lot of put buying traders betting these stocks have huge amounts of downside that just isn’t happening right now” there are other signs investors have a sunnier outlook on stocks than they did just a few months ago positioning in us stocks is stretched for the first time in more than two years a goldman indicator shows while the lowvolatility environment encouraged quant funds to scoop up stocks early in the year now discretionary investors are joining in according to deutsche bank “if you started the year bearish you’ve been really underallocated” wu silverman said “investors are looking at a market that’s rallied 14 and almost not by choice they feel the need to hop on the train” write to eric wallerstein at ericwallersteinwsjcom and gunjan banerji at gunjanbanerjiwsjcom