Traders Haven’t Been this Nervous About Tech Stocks in 14 years

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It’s been a roller-coaster ride for tech stocks.

Just three weeks after pouring $1.8 billion into an exchange-traded fund tracking the sector, the biggest inflow in almost seven years, investors are now the most cautious they’ve been on the tech sector in over a decade.

The so-called fear gauge for the tech-heavy Nasdaq 100 index is trading at its highest level since January 2003, relative to a similar gauge of uncertainty tracking the broader S&P 500, according to Bloomberg data. This suggests investors are significantly more worried about tech stocks than the broader universe of big US companies.

vxn vix ratioBusiness Insider / Andy Kiersz, data from Bloomberg

The shift in tech sentiment came about quickly, possibly catalyzed by a Goldman Sachs report on Friday that warned of complacency around Facebook, Apple, Amazon, Microsoft, and Google — the mega-cap tech stocks that have dragged the sector higher.

Apple specifically came under selling pressure following a report that the coming iPhone 8 wouldn’t be as fast as its rivals. The company’s woes continued Monday after Mizuho analyst Abhey Lamba downgraded his buy rating on the stock to a hold, citing limited upside.

The Nasdaq 100 has dropped 3.2% since Friday, its biggest two-day decline in almost a year.

But that hasn’t stopped options traders from betting on further declines and protecting existing gains. Put contracts for the PowerShares QQQ Trust ETF, the most traded ETF tracking tech stocks, provide a way to hedge against a fall in the tech sector. Trading volume for those put bets surged to more than 1.3 million on Monday, the highest since the collapse of Lehman Brothers in 2008.

QQQ put volume