US retail investors’ put option buying volume surged, with defensive demand rising, though they continued to buy tech stocks on dips.

According to data from research firm Vanda Research, U.S. retail trading behavior has clearly shifted to a defensive posture since April this year. While the total volume of direct stock purchases has declined, the buying volume of put options for the 12 most popular stocks favored by retail investors in 2026 has nearly doubled compared to the first quarter; the proportion of related option purchases to net cash purchases has also risen from around 26% to 110%. Kaidi Meng, global equity strategist at Vanda, noted that unlike the past when retail investors almost uniformly "buy the dip", this year they have become more selective, starting to rotate quickly between stocks, or allocate protective put options while purchasing individual stocks. Since mid-April, trading activity in bullish tech ETFs has dropped by around 50%, while bearish ETF activity has fallen by about 35%, indicating that overall long exposure has contracted. However, data from Charles Schwab shows that retail investors as a whole have not turned bearish. In July, the number of buyers on its platform still outnumbered sellers by more than two times, and the STAX trading activity index rose from 59.12 in June to 59.80, hitting its highest level since January 2022. Retail investors continued to buy high-volatility popular individual stocks during tech stock pullbacks, while funds also rotated from Nvidia to other assets. Joe Mazzola, chief trading and derivatives strategist at Charles Schwab, said some investors are selling put options on Nvidia, Micron, and SanDisk to collect option premiums, while moderately increasing holdings of low-cost QQQ put options to hedge against downside risks in the broader tech sector. He believes that current portfolio defensive moves are evident, but not overly aggressive.