S&P 500 hits $2.6T in call options as AI mania fuels massive gamma squeeze

The S&P 500 recently experienced a significant rally driven primarily by options market mechanics rather than economic fundamentals. A record $2.6 trillion in notional call options created a 'gamma squeeze,' where market makers were forced to purchase stocks and futures to hedge their negative gamma exposure, creating a self-reinforcing upward price cycle. Driven by AI euphoria and geopolitical cooling, this trend highlights how derivatives positioning—rather than earnings or economic data—is increasingly dominating short-term market movements. Experts warn that when these options expire, the sudden evaporation of hedging pressure could lead to sharp market reversals, rendering traditional valuation methods less effective for short-term timing.

(Source：Crypto Briefing)