Why the Opendoor Stock Surge is a Red Flag for Investors: Meme Stocks and Market Euphoria

The S&P 500 Index ($SPX) may be hovering near all-time highs, but something underneath the surface is setting off alarm bells.

In a recent Market on Close segment, hosts John Rowland and “Twitter Tom” pointed to a dangerous market condition we haven’t seen in a while: full-blown euphoria.

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It’s 2021 vibes all over again, as we’re seeing massive options flow into stocks like Opendoor (OPEN) — even outpacing names like Apple (AAPL) and Amazon (AMZN). That doesn’t happen in a rational market.

And the data backs it up.

Signs of a Speculative Surge

Meme stocks are leading the volume charts, as Opendoor, Kohl’s (KSS), and more companies with weak fundamentals are seeing massive inflows.

Options activity is exploding, especially short-dated calls, a hallmark of retail speculation.

Margin debt is spiking at a pace not seen since 1998 — often a late-cycle indicator.

The Barclays Euphoria meter just hit a yearly high. And Citi’s Levkovich Index is also sitting in “euphoria” territory.

Watch the clip for a look at the indicators John & Tom are tracking now:

Why That’s a Problem

Historically, this kind of extreme in investor sentiment tends to mark tops, not bottoms. We saw the same pattern:

• Late 2021: Meme stocks exploded before a sharp market correction.
• 2007: Real estate stocks soared as debt-fueled speculation peaked.
• 1999-2000: Dot-com mania drove euphoria until the bubble burst.

Today’s market isn’t just strong; it’s downright frothy. And with August and September historically two of the worst-performing months for the S&P, it might be time for traders to take a breath and reassess risk.

What You Can Do

Use Barchart tools to stay ahead of the curve:

• Check unusual options activity with Barchart’s Options Flow Screener
• Monitor stocks with rising short interest or volume spikes
• Track key indicators like gamma exposure and put/call ratios
• Explore Barchart Screeners to track speculative vs. value names

On the date of publication, Barchart Insights did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.