We'll see a 'YOLO' options craze in an unexpected industry this year: RBC's Amy Wu Silverman
Speakers
Amy Wu Silverman
— Head of Derivatives Strategy, RBC Capital Markets
Summary
Amy Wu Silverman, RBC Capital Markets head of derivatives strategy, discusses her 2026 volatility outlook. She expects a relatively strong but reluctant equity market, continued retail call-option exuberance shifting into unexpected sectors like health care and industrials, and a much fatter Taiwan tail risk tied to semiconductor and AI supply chains. She also notes muted tariff volatility, shadow hedging behavior, and retail flows potentially rotating toward prediction markets and crypto.
- RBC's 2026 volatility outlook sees a market that rhymes with last year.
- Retail call-option demand and YOLO/FOMO behavior may spread to health care and industrials.
- The market is described as a reluctant rally, with bearish investors still forced to participate.
- Taiwan tail risk is viewed as much fatter, with clients asking how to express it.
- Geopolitical events like Venezuela quickly refocus investors on AI and chips.
- Tariff-related volatility remains muted and panic has not paid in this market.
- Retail flow could rotate toward prediction markets, crypto, or zero-day options.
Ideas
Call-option craze spreads to healthcare, industrials.
RBC's 2026 volatility outlook predicts the retail-driven call-option exuberance (YOLO/FOMO) that has been concentrated in AI and meme stocks will spread to unexpected industries, especially health care and industrials. The rationale is that option skew has flipped toward call demand post-Covid, retail prefers buying calls, and investors are seeking 'show me' proof that AI can make health care and industrial companies more efficient.
Reluctant rally keeps U.S. equities strong.
Amy expects a relatively strong year for the market even if retail support rotates to prediction markets, crypto, or zero-day options. She calls it a 'reluctant rally': portfolio managers feel bearish but must stay invested to meet benchmarks, so they participate and engage in shadow hedging, which should keep equities supported.
Taiwan tail risk threatens semiconductor supply.
After the Venezuela situation, clients immediately focused on the Taiwan tail risk as a precedent for other geopolitical surprises and because it threatens the semiconductor/AI supply chain. Amy says the Taiwan tail is much fatter this year, with investors explicitly asking how to express or hedge it, and all roads lead back to AI and chips.
