SPY Options Indicate a Move Higher Past $670—Is Now the Time for Traders to Consider $700 Calls This Week?

SPY Options Market Update: Key Levels and Trading Strategies

• SPY is trading at $671.12, up 0.31% from the opening price.
• Options flow shows a preference for puts at $660 and calls at $700, with a put/call ratio of 2.01 indicating more bearish hedging.
• Large trades reveal significant bearish interest at the $680 put, while bullish call activity is notable at $650 for contracts expiring in April.

The SPY options market is sending mixed signals today. While bulls remain cautiously optimistic, bears are actively hedging at crucial price points. The current setup hints at a possible move above $674, but traders should remain alert to potential risks along the way.

OTM Options Reveal Market Sentiment

Examining out-of-the-money (OTM) options, the highest open interest for calls is at $700 (69,213 contracts) and $690 (52,519 contracts), both expiring this Friday. This suggests many traders are positioning for a potential rally in SPY by week’s end.

On the put side, the largest concentration is at $660 (164,508 contracts), with additional interest at $520 and $580. Rather than signaling panic, this activity appears to be protective—investors are insuring against unexpected market drops.

Notably, a substantial block trade of 11,250 puts at the $680 strike, expiring in June and valued at $29.4 million, stands out. This move likely represents either a hedge against downside risk or a bet that SPY will stay above $680 through June, setting a potential support level for the months ahead.

Technical indicators show the RSI at 36 and a negative MACD, pointing to a short-term bearish trend within a longer-term sideways pattern. The $680–$686 range, aligning with the 30-day average, is a critical resistance zone. A breakout above this could open the door to the $690–$700 area this week.

Quiet News Cycle: A Technical Trader’s Market

With no major news or earnings reports on the horizon, SPY’s price action is being shaped by technical factors and options sentiment rather than headlines. This environment often favors traders, as price movements tend to be more predictable and less prone to sudden shocks.

Should SPY surpass the upper Bollinger Band at $697, there are few external factors likely to trigger a reversal. For those trading this move, the absence of distracting news could provide a clearer path.

Trade Setups to Consider

If you have a bullish outlook:

• Buy SPY20260320C700 calls expiring this Friday. With the highest open interest (69,213 contracts), this strike offers strong liquidity and upside potential if SPY closes above $690.
• Alternatively, consider SPY20260327C700 calls for next week. With 14,895 contracts open, this option provides more time for the trade to develop and is a slightly more conservative play.

If you prefer a bearish or neutral stance:

• SPY20260320P660 puts are the most active. These can be used to hedge long positions or as a direct bet on a market pullback.

For those trading the underlying stock:

• Look for buying opportunities near $670–$672 if the 30-day average holds. A decisive close above $686 could signal further upside. Consider targeting $695 on the upside, with a stop just below $664 (the lower Bollinger Band) for risk management.

Volatility Watch: What Lies Ahead

With significant bearish block trades at $680 and bullish bets at $700, SPY is poised for a potential breakout or breakdown. The key level to monitor is the 30-day moving average at $683.21. A close above this threshold by Friday could set the stage for a move toward $700.

This scenario presents a well-defined trading opportunity, with clear entry and exit points. The current options activity highlights where traders should focus their attention. For those seeking a setup with both clarity and potential, this week offers promising prospects.