Options Traders Bet Big on 'Santa Squeeze' as 2025 Wraps Up
Tesla $500 calls, Nike volume at 13x average, and a gamma pin around S&P 6,800 define year-end positioning as retail traders drive 25% of market volume.
The options market is telling a clear story heading into 2026: traders are betting on momentum.
Tesla's $500 strike has become the most active single-name options trade of December, with nearly 3 million contracts changing hands on peak days. Nike call volume spiked to 13 times its daily average after Tim Cook's $3 million purchase. And a gamma pin has formed around the 6,800 level on the S&P 500, creating a magnetic effect that could amplify moves in either direction.
This is what the "Santa Squeeze" looks like in 2025.
Tesla's $500 Magnet
Tesla has reclaimed its throne as the most traded options underlying this month.
Traders are aggressively targeting the $500 strike, a psychologically significant level the stock has approached but not sustained. With shares trading around $485, the calls are slightly out-of-the-money—cheap enough to attract speculators, close enough to have real delta.
Sentiment is overwhelmingly bullish. Put volume has lagged call volume by a wide margin, and the positioning suggests traders expect Tesla to break through $500 before year-end or early January.
The setup creates feedback loops. As the stock approaches $500, market makers who sold those calls need to buy shares to hedge, pushing the price higher. If it breaks through, that hedging accelerates. If it fails, the calls decay and the pressure reverses.
December 26 expiration options showed a put sweep at the $480 strike—177 contracts with bearish sentiment—but the overwhelming flow has been calls. Traders are betting on continuation, not reversal.
Nike's Volume Explosion
Tim Cook's insider purchase triggered one of the year's most dramatic options volume spikes.
Call volume in Nike hit 133,145 contracts on the news—13 times the average daily volume and 4 times put activity. Most volume concentrated in the December 26, January 2, and January 16 expirations, suggesting traders expect a near-term move.
The $60 strike attracted the heaviest action, with over 50,000 contracts trading across multiple expiration dates. Nike shares had fallen roughly 13% after disappointing earnings, sliding from $69 to a low near $57. Cook bought 50,000 shares at $58.97.
The options flow reads as a bet that Cook knows something—or at least that other traders believe he does. Insider buying from a high-profile director carries signal value beyond the dollars involved. The options market is pricing in a potential turnaround.
The Gamma Pin
Broader market positioning reveals a technical setup that could drive volatility either way.
A "gamma pin" has formed around the 6,800 level on the S&P 500. This happens when open interest is concentrated at a specific strike, creating a magnetic effect as market makers hedge their exposure.
When the index approaches 6,800, dealers adjusting their hedges tend to push it back toward that level. Moves away from the pin require enough force to overcome the hedging flows—either a genuine catalyst or a positioning washout.
The pin began forming in early December and has intensified as year-end approaches. With many trading desks thinly staffed during the holidays, the technical effect is amplified. Lighter volume means hedging flows have a larger relative impact.
For traders, the pin creates a range-bound environment until something breaks it. A strong jobs report, an unexpected headline, or simply the passage of time as options expire could release the tension.
Retail's Growing Influence
The final weeks of 2025 have confirmed a structural shift in options markets.
Retail traders now account for roughly 25% of total options volume, up from negligible levels a decade ago. This "maturing" retail class—as some dealers describe it—has moved beyond the YOLO call-buying frenzy of 2021 toward more sophisticated strategies.
That doesn't mean retail is cautious. The Tesla $500 calls and Nike volume spike both carry retail fingerprints. But the positioning is more informed, more responsive to catalysts, and more integrated into overall market dynamics.
Dealers have adapted. The zero-day-to-expiration (0DTE) options that retail loves now comprise a significant share of daily volume. Market makers have built infrastructure to handle the flow, and the resulting hedging activity has become a first-order driver of intraday price action.
What to Watch
The "Santa Claus rally" window runs through January 5—the last five trading days of December plus the first two of January. Historically, the S&P 500 gains an average of 1.6% during this stretch.
Options positioning suggests traders expect that pattern to hold. Bullish bets dominate across Tesla, Nike, and the broader indices. The gamma pin around S&P 6,800 could either contain the move or, if broken, accelerate it.
Volume will be light through New Year's, making prices more volatile on any given headline. The thin liquidity that suppresses moves can just as easily amplify them when a catalyst arrives.
For options traders, the setup rewards patience and precision. The year-end flows are well-telegraphed. The question is whether the market delivers on expectations or springs a surprise.