SPY Options Signal $680 Bullish Battle as Puts Dominate Open Interest – Here’s How to Play It

• SPY trades at $676.36, up 0.74% with volume surging to 71.6M shares.
• Put/call open interest ratio hits 1.74, showing bearish bias despite long-term bullish trends.
• Block trades reveal $4.5M call buy at $657 and $2.4M put activity at $680.

Look, SPY’s options market is screaming a story right now. On the surface, it’s a tug-of-war between bears hoarding puts and bulls stacking calls at $700. But dig deeper, and the 30-day support/resistance at $681–$685 becomes the real battleground. Let’s break it down.

The $680 Call Wall and Bearish Put Overload

SPY’s options chain is a chessboard. The top OTM call at $700 has 95,258 open interests—triple the next strike. That’s a wall of bullish conviction. But the puts? They’re a landslide. The $505 put has 216,149 open interests, dwarfing even the $650 put at 90,682. This isn’t just bearish—it’s a stampede.

Here’s the twist: Block trades like the $4.5M SPY20250930C657 call buy in September suggest big players are hedging or accumulating for a long-term play. Meanwhile, the $2.4M SPY20251121C680 call block (5,000 contracts) hints at near-term bullish positioning. But don’t ignore the puts—those 216K contracts at $505 could drag SPY lower if fear takes hold.

News That Could Flip the Script

The recent CPI drop to 4.6% and strong job numbers (64K added in November) are fueling SPY’s upward momentum. Analysts are bullish on AI-driven sectors like industrials, which lifted SPY components last week. But here’s the catch: Vanguard’s VOO and VXUS are stealing SPY’s thunder. VOO’s 0.03% fee vs. SPY’s 0.09% is a long-term drag, while VXUS’s global outperformance adds noise.

The real wildcard? Fed rate cut expectations. If inflation stays "agreeable," SPY could ride the liquidity wave. But if global markets falter, SPY’s U.S.-focused structure might lag. The news isn’t a red flag—it’s a mixed bag. Bulls need to watch for sector rotation, while bears should eye VXUS’s rise.

Trade Ideas: Calls at $680, Puts at $650, and a Bullish Stock Play

For options, the SPY20251219C680 call (expiring Friday) is a high-conviction bet. With 73,542 open interests, it’s the most liquid strike. If SPY holds above its 30-day MA ($676.31) and breaks the $684 resistance, this call could pay off. For a longer play, the SPY20251226C685 call (7,576 OI) offers leverage if the ETF surges past $685.

On the bearish side, the SPY20251219P650 put (90,682 OI) is a safety net. If SPY dips below the lower Bollinger Band ($657.86), this put could cap losses. But don’t overcommit—SPY’s 200-day MA at $621.51 is a long-term floor.

For stock, consider entering near $677.65 (the middle Bollinger Band) with a stop-loss below $674.90. If SPY holds, target $684 as a short-term peak. A breakout above $685 could trigger a rally toward $700, but watch for profit-taking at $690.

Volatility on the Horizon: Positioning for SPY’s Next Move

SPY isn’t just a proxy for the S&P 500—it’s a barometer for market sentiment. The options data and news both point to a volatile December. Bulls have the upper hand with strong fundamentals, but bears are hedging aggressively. Your edge? Focus on the $680–$685 range. If SPY holds, it’s a setup for a breakout. If it cracks, the puts at $650 could save your skin. Either way, this ETF isn’t going to sleepwalk into 2026.