SPY Options Signal $680–$700 Battle: Put Dominance and Whale Moves Point to Strategic Entry Zones

• Put open interest dwarfs calls 2.4:1, with $550–$600 puts dominating the options chain.
• Block trades reveal $6M+ in deep put selling ahead of March 2026 expiration, hinting at bearish positioning.
• SPY upgraded to 'Buy Candidate' after breaking above key Bollinger Band support at $688.82.

Here's the takeaway: SPY is caught in a tug-of-war between short-term bears and long-term bulls. The options market is screaming caution on the downside, but technicals suggest a rebound could be brewing near $688. Let's break down what this means for your trading desk today.

The Put/Call Imbalance: A Bearish Fortress at $680

The options chain tells a clear story: market participants are bracing for a potential drop. Put open interest is concentrated at extreme levels—$550 puts alone have 170,422 contracts outstanding, while $600 puts add another 85,792. That’s like building a fortress of bearish bets 500 points below current price.

But here’s the twist: Call open interest isn’t negligible. $690–$700 calls (SPY20260130C690, SPY20260130C700) have 21,281–23,324 contracts outstanding. This suggests some traders are hedging a rebound if SPY breaks above the $690.96 intraday high.

The block trades reinforce this duality. A $5.87M sale of 6,000 SPY20260320P675 puts and $2.89M in SPY20260320P645 puts shows big players are locking in downside protection for March. But the $1.99M buy of SPY20260618C710 calls (expiring June) hints at a longer-term bullish bet on a $710+ move.

News Flow: Trump’s Davos Speech vs. Greenland Risks

The market’s love affair with SPY is being tested by conflicting signals. Trump’s Davos speech calmed trade war fears, lifting SPY 0.493% on Thursday. Teledyne’s earnings bonanza added fuel to the fire, pushing SPY into positive territory.

But don’t ignore the shadow of Greenland. The $750B market value lost by the S&P 500 after Trump’s threats still lingers. The wedge pattern forming on the index chart (with SPY mirroring it) suggests volatility is coming. If SPY breaks below $685.35 support, the $680–$683.24 resistance zone could become a battleground.

Actionable Trades: Calls for the Bull, Puts for the Bear

For options traders:

• Bullish Play: Buy SPY20260130C690 calls (strike $690, expiring Jan 30). Target $700 if SPY breaks above the $690.96 high.
• Bearish Play: Buy SPY20260130P680 puts (strike $680, expiring Jan 30). Target $675 if SPY tests the 200D MA at $636.

For stock traders:

• Entry Near $688: Buy SPY if it holds above $688.82 (middle Bollinger Band). Target $695 if the 30D MA at $686.36 holds.
• Stop Loss: $683.24 (200D resistance zone).

Volatility on the Horizon: A March 2026 Crossroads

The next 30 days will test SPY’s resolve. If the $688.82 level holds and SPY closes above $690.96, the 100D MA at $673.46 could become a floor for a multi-month rally. But a breakdown below $680 would validate the put-heavy options bets and force a reevaluation of the long-term bullish thesis.

Either way, the $680–$700 range is where the action will be. Position yourself with options that let you ride the trend—whether it’s up or down—without getting whipsawed by the noise.