SPY Options Signal Bullish Momentum: Key Strikes and Block Trades Point to Strategic Entry Zones

• SPY trades at $684.57, up 0.22% with volume surging to 31.6M shares.
• Call open interest spikes at $700 and $695 strikes, while puts dominate at $555–$680.
• Paul Tudor Jones trims stake, but Fed policy uncertainty fuels short-term volatility.
• Bullish bias confirmed: Technicals, options flow, and block trades align for a potential breakout above $685.

What the Options Chain Reveals About Market Sentiment

Let’s start with the elephant in the room: call open interest at the $700 and $695 strikes is stratospheric for Friday’s expiration. That’s 22,718 and 15,367 contracts, respectively—numbers that scream "institutional conviction." Meanwhile, puts at $555 ($504K OI) and $680 ($26.6K OI) suggest hedgers are bracing for a crash. But here’s the twist: the put/call ratio of 2.01 isn’t bearish—it’s a classic "buy the rumor, sell the news" setup. Sellers are pricing in a Fed pivot, not a crash.

Don’t ignore the block trades either. The SPY20251121C680 call (bought for $707K) and SPY20250916P680 put (mystery trade) hint at a big player hedging a long bias. It’s like watching a chess match—every move tells a story.

How News and Fed Hopes Shape SPY’s Path

Paul Tudor Jones trimming his SPY stake by 0.72%? That’s a red flag for some. But let’s put it in context: his portfolio is a $10B beast. A 0.72% reduction is just portfolio rebalancing, not a bearish bet. What really matters is the Fed’s looming policy decision. The last week’s news cycle—"interest rate cut hopes," "mixed futures," and "inflation reports"—has SPY dancing to the central bank’s tune.

Here’s the kicker: traders are pricing in a soft landing narrative. The block trades and options flow suggest they’re betting on a Fed that cuts rates in Q1 2026, not a rate-hiking spiral. That’s why the $690–$700 calls are so popular—they’re cheap insurance for a post-Fed pop.

Actionable Trades for Today: Calls, Puts, and Precision Entries

Let’s get tactical. For options traders, the SPY20251219C690 and SPY20251219C700 calls (expiring next Friday) are your best bets. Why? The $690 strike is just above today’s high of $685.22, and the $700 level has 99K open contracts—liquidity is king. If SPY breaks above $685 today, these strikes could see explosive volume.

For stock players, watch support at $683.20–$683.90 (30D level). A close above $685.22 validates the bullish case. Target $690–$695 as a first profit zone, with a longer-term goal at the 30D MA of $676.49 if the Fed delivers.

Volatility on the Horizon: Bullish Trends With a Caveat

SPY isn’t in a vacuum. The RSI at 71 and MACD above signal line point to a short-term top, but the 200D MA at $618.71 is still a massive support wall. The real risk? A Fed that surprises to the hawkish side. If inflation data next week shocks the market, the $670–$654 Bollinger Band range could become a battleground.

Bottom line: This is a high-conviction bullish setup, but don’t ignore the puts at $680 and $670. They’re there for a reason. Play it like a poker hand—aggressive if SPY holds $683, cautious if it breaks below $681.31. The next 72 hours will tell us if this is a breakout or a false flag.