SPY Options Signal $700 Call Contention as P/C Ratio Hits 1.74—Here’s How to Play the Volatility

• SPY surges 1.07% to $678.57, trading near 30D support/resistance at $683.30–684.04

• Put/call open interest ratio hits 1.74, with $505 put (OI: 216,149) dominating bearish sentiment

• Block trade buys 6,000 SPY20250930C657 calls ($657 strike) ahead of Sept expiration

The market is torn between cautious bearishness and a brewing bullish push in SPY. With options data showing heavy put dominance but key call strikes gathering steam, today’s $678.57 price sits at a crossroads. Here’s what traders need to know: the short-term bearish trend is clashing with long-term bullish momentum, and the $700 level could be the next battleground.

Bullish Calls vs Bearish Puts: A Battle for SPY’s Direction

The options market is a chessboard of conflicting signals. On the bearish side, the $505 put (OI: 216,149) and $555 put (OI: 117,765) dominate open interest, suggesting deep-seated fear of a prolonged selloff. But the top OTM call strikes—$700 (OI: 95,258), $680 (OI: 73,542), and $690 (OI: 66,729)—show a different story. Traders are clearly pricing in a potential breakout above $683.30, the 30D support/resistance level.

Block trades add intrigue. The purchase of 6,000 SPY20250930C657 calls in September hints at institutional confidence in a mid-2026 rebound. Meanwhile, the SPY20251121C680 call block (5,000 contracts) suggests near-term bullish positioning. These moves signal a strategic bet: if SPY holds above $675.69 (intraday low), the $680–700 range could see aggressive call buying.

News Flow: Trump Tariffs and Tech Volatility

Recent headlines about Trump’s potential China tariff cuts and H-1B visa fees have SPY’s tech-heavy holdings in the spotlight. The ETF’s 3.04% allocation to Broadcom (AVGO) and exposure to Amazon/Apple earnings volatility mean it’s highly sensitive to sector rotations. While the 2026 "brutal" market outlook raises caution, the November jobs data (64K added, 4.6% unemployment) has kept cyclical sectors like industrials and consumer discretionary afloat. This mixed bag means SPY could act as a barometer for broader market sentiment—up if tech rebounds, down if macro risks flare.

Actionable Trade Ideas: Calls, Puts, and Price Levels

For options traders, the SPY20251219C680 call (expiring this Friday) is a high-conviction play if SPY breaks above $683.30. With 73,542 contracts in open interest, this strike could see a liquidity pop. For a longer-term angle, the SPY20251226C690 call (next Friday’s expiration) offers leverage if the ETF closes above $685.31 (200D resistance).

Stock traders should watch two key levels: enter near $677.65 (middle Bollinger Band) if SPY holds above $675.69, with a target at $683.30. A breakdown below $675.69 would validate the short-term bearish trend, making the SPY20251219P650 put (OI: 90,682) a defensive play.

Volatility on the Horizon: Balancing Bullish and Bearish Forces

SPY’s path forward hinges on three factors: 1) Whether the $680–700 call strikes attract enough buying to push the ETF above 30D resistance, 2) How Trump’s trade policies and Fed rate expectations collide in early 2026, and 3) If tech sector earnings can rekindle momentum. The RSI at 39.33 suggests oversold conditions, but the MACD histogram (-0.98) warns of lingering bearish momentum. Traders who position for a $680–700 breakout while hedging with $650 puts could ride the volatility without overexposing their portfolios.