Core Insights - The market risk appetite has improved following the Trump administration's delay in trade negotiations and active dialogues with major trade partners [1] - The popularity of "0DTE" options has surged, with trading volume reaching a historical high, indicating a growing trend among short-term investors [2][3] - The emergence of the "TACO trade" strategy reflects investor behavior in response to Trump's fluctuating tariff policies, leading to new trading patterns in the derivatives market [4][5] Group 1: 0DTE Options - In May, the trading volume of "0DTE" options linked to the S&P 500 surged to a record 61%, marking a significant milestone for this popular trading strategy [2] - The short-term nature of these options allows investors to engage with lower premiums while aiming for substantial returns, attracting many short-term traders [2] - The increase in "0DTE" options trading is largely driven by retail investors, with a notable 9 percentage point rise from April [2] Group 2: TACO Trade Strategy - The "TACO trade" strategy, which stands for "Trump Always Chickens Out," capitalizes on the market's reaction to Trump's tariff announcements and subsequent retreats [4] - This strategy involves using collar options to hedge against significant losses while limiting potential profits, reflecting investor sentiment towards short-term volatility [4] - Market experts suggest that as the S&P 500 approaches 6000 points, similar trading patterns will re-emerge, driven by Trump's strong rhetoric and its impact on market volatility [5]