Retail traders are closing out the year on a heater. Buying the dip, leaning hard into AI stocks, riding precious metals, and swinging big on speculative names has paid off. Goldman Sachs baskets tracking retail favorites, high beta momentum, and unprofitable tech are all comfortably beating the S&P 500 this year.
More importantly, retail activity is no longer just noise. It is actively shaping how stocks trade around earnings, squeezing institutions into crowded positions, and driving sharp moves that often have little to do with fundamentals.
Options are the real sentiment gauge
If you want to know how aggressive retail traders feel, look at the options market. Call buying has become the primary accelerant behind meme stock surges, zero-news rallies in quantum computing stocks, and sudden momentum explosions across speculative corners of the market.
Short-dated options in particular are doing the heavy lifting. Stocks are increasingly trading like sentiment thermometers, where near-term price action is dictated by options with five days or fewer to expiration rather than long-term business outlooks.
Not every call is speculative. Some are sold as part of income strategies. Still, it is hard to look at the growth in call volume and not see echoes of the 2020 to 2021 period when SPACs, meme stocks, and ultra-risky trades dominated the tape.
This cycle feels familiar, but bigger
Back then, stimulus checks and lockdown boredom fueled speculation. Today, it is easier access to options, especially zero-day contracts, combined with platforms like Robinhood that have lowered friction even further.
Median daily call volume across US exchanges has surged over the past three months, making it one of the cleanest indicators of speculative appetite in the market. Watching whether that volume keeps climbing or starts to fade could answer some big questions.
Is the speculative boom still accelerating?
Do stocks still rise if call activity cools?
Are other outlets like prediction markets pulling attention away from options?
The answers will shape how much influence retail traders continue to wield in 2026. For now, the message is clear. Retail is not just participating in this market. It is driving it.