Meme Stocks Dominate 40% of Wall Street Options Activity as Retail Traders Target BYND and DNUT

Reddit-fueled retail traders are driving unprecedented volatility in the options market, with meme stocks now accounting for 40% of Wall Street's derivatives activity. Beyond Meat (BYND) and Krispy Kreme (DNUT) have emerged as the latest speculative battlegrounds, despite both companies reporting negative earnings.

Wednesday's trading session saw BYND options volume surge to 9.4 times its 20-day average, while DNUT contracts traded at 38 times normal activity. The sub-$5 share prices make these stocks inaccessible for margin accounts, forcing retail traders to employ high-leverage options strategies instead.

The most active contracts reveal extreme directional bets: 147,000 BYND $3 puts imply a 28% downside target, while 104,000 $4 calls position for a 52% rally - creating a binary outcome where one side will expire worthless by Friday's close. This frenzy persists because heavy short interest and limited borrow availability prevent institutional investors from effectively countering retail-driven price movements.