Traders are flocking to newly listed zero-day options on major tech stocks as market volatility increases. With the S&P 500 flat for the year and earnings season ending, investors are buying more put options to hedge against potential selloffs. The recent US-Israeli strikes on Iran have heightened concerns about downside risk.

Mandy Xu at Cboe notes that retail traders have grown more cautious on tech, with call buying activity dropping to levels last seen during the 2022 bear market. The launch of Monday and Wednesday expiries on Magnificent 7 stocks like Tesla and Apple in January has expanded short-term trading opportunities beyond the Friday contracts previously available.

While index zero-day options now account for 66% of S&P 500 options trading, single-stock contracts face different challenges. Garrett DeSimone at OptionMetrics warns that idiosyncratic "jump" risk in individual stocks creates significant "left tail risk" for option sellers. This statistical "skewness" is particularly pronounced for Big Tech names compared to diversified indexes.