SPY Options Signal $680 Bullish Bias Amid Put-Call Imbalance – Here’s How to Position for 2026 Volatility

• SPY trades at $679.24, hovering near 30D support/resistance (683.31–684.04) and 200D resistance (681.46–685.32).
• Put/call open interest ratio hits 1.82, with heavy bearish bets at $505–$670 puts vs. bullish calls at $680–$840.
• Block trades show 6,000+ calls bought at $657 and $680 strikes, hinting at near-term bullish positioning.
• CIBC’s 2026 S&P 500 target of 7,450 (SPY ~$745) clashes with short-term bearish technicals.

The market is torn between caution and conviction. Options data screams bearish fear, but block trades and long-term fundamentals whisper of a breakout. Let’s break it down.Bullish Whales vs. Bearish Hedges: Decoding the Options Imbalance

SPY’s options chain is a chessboard of conflicting signals. Put open interest dominates (1.82x calls), with 216,149 puts at $505 (a 30% downside buffer) and 87,991 at $650. But don’t overlook the calls: 95,822 at $700 and 61,883 at $680 suggest big money is hedging for a rebound.

The block trades tell a story. A 6,000-lot buy of SPY20250930C657 and a 5,000-lot SPY20251121C680 show institutional players are locking in upside potential. These strikes align with SPY’s 100D ($661.76) and 30D ($676.44) averages—key psychological levels.

News-Driven Narrative: Rate Cuts, Tariffs, and AI Hype

The unemployment spike to 4.6% and Trump’s China tariff chatter have traders juggling fear and greed. On one hand, a 4-year high in jobless claims could delay Fed rate cuts, weighing on SPY. On the other, Trump’s trade easing and AI-driven growth (NVIDIA, AAPL) are fueling 2026 optimism.

CIBC’s 7,450 target (SPY ~$745) isn’t just a number—it’s a call to action. Analysts are piling into AI and consumer tech stocks held by SPY, which could push the ETF past its 2025 highs if macro risks abate. But don’t ignore the VOO vs. SPY fee war; it’s a red herring for price action, but retail investors switching to VOO could siphon liquidity.

Actionable Trades: Calls for Breakouts, Puts for ProtectionFor the bullish: Buy SPY20251219C680 (OI: 61,883) if SPY breaks above $683.31 (30D support). Target $690–$700, where 69,965 calls are waiting.For the bearish: Sell SPY20251219P670 (OI: 84,936) if SPY dips below $677.60 (intraday low). Pair with a long SPY20251219P650 (OI: 87,991) for a collar.Stock entry: Consider buying SPY near $677.08 (middle Bollinger Band) if it holds above $675. Target $684 (30D resistance) and $690 (call-heavy zone).Volatility on the Horizon: Balancing Risk and Reward

SPY’s RSI at 55.35 and MACD near zero suggest a consolidation phase. But with 2026 on the horizon and CIBC’s $745 target in play, this could be a setup for a breakout. Watch the 200D MA ($681.46) like a hawk—it’s both a psychological hurdle and a technical trigger.

Final Take: The options market is a tug-of-war between short-term bearishness and long-term bullishness. If you’re in, play it smart: use the $680 calls as a leveraged bet on a rebound, but keep a tight stop below $675. If you’re out, the puts at $650–$670 offer cheap insurance against a selloff. Either way, 2026 is shaping up to be a wild ride—SPY could be the vehicle.