QQQ Options Signal Deep Bearish Sentiment: Focus on $600 Put and $595 Put for Downside Protection as ETF Faces Outflows and Tech Sector Jitters

• QQQ drops 1.6% to $602.02 amid $2.2B ETF outflows and Nasdaq-100 index volatility
• Put/call ratio hits 1.59 as 72,110 OI piles into $600 puts expiring Friday
• Block trade sells 5,000 puts at $545 (QQQ20251219P545) for $4.2M, hinting at institutional bearishness

Here’s the bottom line: QQQ is caught in a bearish crossfire. The ETF’s 1.6% drop today aligns with a 1.59 open interest put/call ratio — a clear signal that options traders are hedging for a sharp pullback. With $600 puts dominating the options chain and block trades targeting the $545 strike, the path of least resistance is decisively downward. Let’s break down why this setup matters for traders.

Bearish OI Clusters and Whale Moves Signal Support Tests at $600

The options market isn’t whispering — it’s shouting. For Friday expiration (Dec 19), 72,110 open interest is stacked at the $600 put strike, nearly double the next largest put at $570 (63,616 OI). This isn’t just bearish sentiment; it’s a price level where institutional players are locking in downside protection. The block trade selling 5,000 puts at $545 (QQQ20251219P545) for $4.2M adds weight: someone is betting QQQ will test the $545 level by expiration.

For next Friday (Dec 26), the $595 put (7,515 OI) and $600 put (4,021 OI) suggest a secondary support zone. The key takeaway? If QQQ breaks below $600, the $570–$545 range becomes the next battleground. Call options are a distant second, with the top strike at $635 (10,387 OI) — a sign bulls are on the defensive.

Tech ETF Outflows and AI Sector Jitters Confirm the Bear Case

The news flow isn’t helping. QQQ’s $2.2B outflow this week — coupled with a 0.5% drop in shares outstanding — reflects a rotation out of tech ETFs. Component stocks like Broadcom (AVGO) and Oracle (ORCL) are dragging the ETF lower after earnings misses, while macroeconomic data (4.6% unemployment) fuels fears of Fed rate hikes. Analysts are now questioning the sustainability of AI-driven growth narratives, which QQQ’s heavy weighting in Nvidia and Microsoft makes it particularly vulnerable to.

This isn’t just a technical correction — it’s a shift in investor psychology. The ETF’s recent rebalancing to include Western Digital highlights its AI focus, but that same concentration now feels like a liability in a cooling market.

Actionable Trades: Short QQQ at $602, Buy $600 Puts for Downside Protection

For stock traders: Short QQQ at $602.02 with a stop above $613.45 (middle Bollinger Band). Target $588.51 (lower Bollinger Band) as the first level, then $570–$545 if the ETF breaks below $600. The RSI at 53.2 and MACD histogram (-0.88) confirm weakening momentum.

For options: Buy QQQ20251219P600 puts at $12.50–$13.00 for Friday expiration. If you want a longer play, QQQ20251226P595 puts at $14.00–$14.50 offer protection into next week. These strikes align with the highest open interest and block trade activity, giving you a high-probability edge if the ETF continues its slide.

Volatility on the Horizon: QQQ’s Path to $545 or a Rebound?

The coming days will test QQQ’s resolve. A close above $613.45 could trigger a rebound, but the 30-day support at $608.32 is fragile. If the ETF breaks below $600, the $570–$545 range becomes critical. For now, the options market and news flow are in sync: this is a bearish setup with clear price targets. Stay nimble — the tech sector isn’t done correcting, and QQQ’s AI-heavy portfolio makes it a prime candidate for further downside.