(Bloomberg). — Day-traders’ obsession with bullish options for speculating on stocks is threatening the long-standing relationship between the U.S. stock market and its benchmark volatility index.

Cboe Volatility Index (and the) moved in the opposite direction. Instead, they rose unison in two weeks. This was a rare stretch of synchronized growth not seen for 14 months.

Another interpretation is that there’s a rising sense of unease as traders raise the prices for bearish options which, in turn, lifts the. However, a Susquehanna International Group analysis showed that the reverse is true. Investors are flocking towards call options to try to make gains in stocks like Tesla Inc. (NASDAQ:) Corp.), and Nvidia Corp. (NASDAQ:) Corp. This has led to an upsurge in upward volatility. This index rose for the third consecutive week, along with Cboe NDX Volatility Index. It is the longest streak since January 2018. 

“The increase in upside volatility has been even more notable, with historically high call skew now priced into the NDX and many of the individual names,” Christopher Jacobson, a strategist with Susquehanna, wrote in a client note. That’s “reflecting demand for upside exposure and a shift in perceived tail risk incrementally away from the downside tail and toward the upside tail, even as the index and the individual names hit new highs.” 

This pattern is indicative of traders’ fear that they might miss out on profits after stocks have crashed amid stronger-than-expected earnings, and the dovish pivot by major central banks. The S&P 500 was flat at 12:15 p.m. in New York, after rising in 16 of the previous 18 sessions, its best run since 1990. VIX rose 4.4%, to 17.21.

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The Nasdaq 100 lost 0.2%, weighed down by Tesla as Elon Musk’s Twitter (NYSE:) followers voted in favor of selling 10% of his stake in a poll set up by the electric-car chief. The tech-heavy gauge managed to score two consecutive weeks without one down day. This is a feat that’s only been achieved once — in 2017.

The Nasdaq 100’s call skew, or a measure of the cost of bullish options, sat at the 98th percentile of its five-year range, according to data compiled by Susquehanna. Susquehanna tracks 20 large-tech stocks. This pattern shows shares rising and volatility increasing. Their implied volatility was plotted over time by the firm. It found that nearly half of the stocks had their call skew in the top 5 per centiles of a 2-year range.

Although other investors might have contributed to this option frenzy but one player is still prominent — the retail crowd. The retail crowd is clearly demonstrating their power with a rise in small-lot call premiums, which are widely used as indicators of consumer interest. Susquehanna’s Options Clearing Corp. data shows small-lot calling premiums have increased in recent weeks and are now close to the January peak. 

It was evident that the phenomenon was stronger in stocks with small capital. Credit Suisse (SIX) Group AG strategists, led by Mandy Xu. While the underlying cash index rose 6%, the implied volatility for the iShares ETF in the first month increased by 1.5 points. The demand was strong enough that short-term options are more costly than those with a longer term, which caused an inversion unlike any other in the past year. 

Bloomberg shows that calls surged to record levels, bringing the total volume of contracts per day up to 30 million, which is second in history.   

“The moves have been large and the demand for upside in single stock land insatiable,” said Danny Kirsch, head of options at Cornerstone Macro LLC. “Single stock vols clearly feeding into the index.”

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