Retail anxiety in the American stock markets has risen to a level not seen in more than twenty years. The ROBO Put/Call Ratio has risen for the first time in at least 20 years to 1.0.
This level is above the peak of 0.91 during the financial crisis of 2008 and the 0.95 that was reached during the sell-off in the pandemic of 2020. The ratio has doubled since December, marking the sharpest increase since the beginning of the bear market in 2022.
“This ratio tracks retail open buy orders in options, with the current level showing that retail traders are buying nearly as many puts as calls… Fear is spreading in this market,” according to The Kobeissi Letter.
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The market sentiment is also reflected in the CNN Fear & Greed Index, which has fallen to 23 and is now on the brink of extreme fear territory.
Bearish positions are reaching rare extremes
The increase coincides with rising short positions across all major US indices. According to data from Global Markets Investor, the median short interest for the S&P 500 is currently around 3.7%, the highest level in 11 years.
The Nasdaq 100 is at about 2.7% short interest, the highest point in 6 years. The Russell 2000 is nearly at 5.0%, the highest level in 15 years.
The last time all three indices showed such high short interest simultaneously was during the European debt crisis of 2010-2011. This coincidence is important because it means that bearish conviction is broader than just one sector or market cap group.
“All three indices have seen a sharp increase in short interest since mid-2024, which further accelerates in 2026,” the report stated.
BeInCrypto recently reported that hedge funds worldwide are shorting stocks at the highest rate in 13 years, with short sales surpassing long purchases by a ratio of 7.6 to 1.
The simultaneous combination of extreme retail fear, an almost extreme Fear & Greed Index, and high institutional short positions creates a clear imbalance. Even a small positive catalyst could lead to forced covering of shorts across various indices, potentially causing a rapid, chaotic rally.
The contrarian argument is growing, but a catalyst is needed. Sentiment alone does not turn markets. The key question is whether the current fear indicates real, fundamental deterioration, or is just an outlier caused by psychological peak fear.
A solution in the escalating conflict between the US and Iran could be the kind of macro shock that changes the narrative. However, as long as there are no signs of de-escalation, the market remains in a wait-and-see stance between peak fear and a potential turnaround.
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