Trump’s Tariff Spark Options Frenzy — Stocks to Watch

Retail investors are bracing for a decisive moment as President Donald Trump’s April 2 tariff announcement looms. After months of tariff-induced market volatility, many have seized the opportunity to buy the dip. With the announcement now imminent, their strategy is about to face a critical test.

“They’re standing on the edge of either a major win or a costly mistake,” investor-research firm Vanda Research noted in a recent report.

Vanda Research data shows that despite the S&P 500 pulling back from its February 19 peak, retail investors have poured over $32.9 billion into U.S. stocks. This influx places retail buying activity in the 97th percentile for any 24-trading-day period since 2014.

Beyond equities, there has been a notable surge in options trading. Marco Iachini, senior vice president of research at Vanda, highlighted a shift toward bullish call options, signaling that investors may be positioning for a market rebound.

“The spike in options activity on Monday prompts a key question: Are investors hedging against uncertainty ahead of April 2, or are they reinforcing their belief in a market recovery?” Vanda’s report stated.

While options buying typically aligns with increased equity purchases, the divergence seen this week suggests a more tactical approach. Options contracts require less capital upfront than stock purchases, enabling investors to maintain exposure while managing risk.

This strategy mirrors patterns seen in August 2024, when a sharp market selloff led to a similar rise in options activity. Investors may once again be hedging their bets, preparing for both volatility and potential upside in the wake of the tariff decision.