SPY Options Signal Bullish Momentum: Key Strikes and Whale Moves to Watch for Holiday Trading

• SPY trades at $690.38, up 0.35% with volume surging to 39M shares.
• Options data shows heavy call open interest at $698 (next Friday expiry) and put dominance in the put/call ratio (1.69).
• Block trades reveal a $4.5M call buy at the $657 strike and bearish put activity ahead of January 2026.

Here’s the takeaway: SPY’s technicals and options flow point to a bullish bias with risk skewed to the upside. Traders should watch how the $690–$698 range plays out ahead of the holidays.

Bullish Sentiment in Options, But Caution at Key Strikes

The options market tells a story of cautious optimism. For next Friday’s expiry (Jan 2), the SPY20260102C698 call has 25,548 open contracts—the highest of any strike. This suggests positioning for a breakout above current levels. Meanwhile, the put/call ratio (1.69) shows puts dominate overall open interest, but the top OTM puts ($659–$687) are more about long-term hedging than near-term bearishness.

Block trades add intrigue. A $4.5M buy of SPY20250930C657 (expiring Sept 30) hints at institutional confidence in the broader uptrend. But don’t ignore the bearish signal: a 750-lot sell block at SPY20260116P645 (Jan 16 expiry) could indicate short-sellers preparing for volatility.

No Major News, But Technicals Drive the Narrative

There’s no recent headline risk for SPY—no earnings, no sector-specific shocks. That means the options action is likely tied to macro themes: the S&P 500’s resilience amid Fed pause speculation and AI-driven earnings optimism. Retail traders might be underestimating how the 200D MA ($623) acts as a psychological floor. If SPY holds above $681.46 (200D support zone), the technical bias stays firmly bullish.

Actionable Trades for SPY and Options

For options traders, consider these setups:

• Bullish Play: Buy SPY20251226C698 (this Friday expiry) if SPY breaks $690.83. Target: $701 (next resistance). Max risk: $1.45 per contract.
• Bearish Hedge: Sell SPY20251226P680 (this Friday expiry) if price dips to $687.80 (intraday low). Protect with a stop below $683.30.
• Long-Term Bet: Buy SPY20260102C698 (Jan 2 expiry) to capitalize on a potential post-holiday rally. Watch volume spikes at $695–$700.

For stock traders, key levels are:

• Entry: Consider buying SPY near $683.30 (30D support) if it holds above $681.46.
• Targets: First resistance at $690.83 (current high), then $698 (call-heavy zone).
• Stop: Below $681.46 triggers a reevaluation of the bullish case.

Volatility on the Horizon

The next 72 hours will test SPY’s resolve. A close above $690.83 could trigger a short-covering rally, while a drop below $687.80 might invite profit-taking. Either way, the options data shows the market expects a directional move—not a sideways grind. Keep an eye on the $698 strike: if that call-heavy zone starts to unwind, it could signal a shift in sentiment.

Bottom line: This is a setup where bulls have the edge, but discipline matters. Define your risk at key support levels and let the technicals guide your exit. The holidays won’t pause the market, and SPY’s options are already pricing in a New Year’s Eve show.