Retail Investors Remain Cautious but Not Discouraged in AI Trade
Retail investors are maintaining their interest in the artificial intelligence trade, though they have become more selective and cautious. According to data from Vanda Research and Charles Schwab, many are using put options and inverse ETFs as tools for downside protection while still seeking upside potential in tech stocks. Vanda's global equity strategist Kaidi Meng noted that retail investors now exhibit a different behavior compared to previous years—switching between stocks quickly or purchasing protective puts alongside underlying assets. Put buying of the top 12 AI-favored stocks has nearly doubled since April, despite an overall decline in cash purchases. Meanwhile, Charles Schwab data shows continued bullish activity among its clients, with increased trading and a net buyer trend persisting through July. However, there was less interest in rangebound tech stocks compared to those showing sharper price movements.
Topics: artificial intelligence inverse ETFs options trading retail investors