SPY Options Signal Bearish Overhang as Bulls Test 690 Resistance – Here’s How to Play It

• SPY trades at $685.4, clinging to a 0.15% intraday gain amid heavy put open interest at strikes like $550 and $500.
• Put/call open interest ratio hits 2.17, showing bears dominate positioning—yet technicals hint at a short-term bullish breakout.
• Block trades bought 6,000 calls at SPY20250930C657 and 5,000 calls at SPY20251121C680, signaling big money bets on a late-year rally.

Here’s the takeaway: the options market is bracing for a potential bearish shock, but SPY’s technicals and recent block trades suggest a fight for $690 could spark a countertrend move. Let’s break it down.

Bullish Resistance vs Bearish Overhang: What the Options Are Saying

The options chain tells two stories. On the bearish side, puts at $550 ($OI: 209,647) and $500 ($OI: 203,400) show massive downside positioning—like a crowd betting on a market crash. But here’s the twist: calls at $690 ($OI: 23,432) and $700 ($OI: 18,713) are hotspots for near-term bullish bets. Traders are pricing in a possible push toward 690, especially with the 30D support/resistance zone at 683.2–683.9 acting as a floor.

Don’t ignore the block trades either. The 6,000 calls bought at SPY20250930C657 (expiring Sept 30) and 5,000 calls at SPY20251121C680 (Nov 21 expiry) suggest institutional players are hedging or scalping a late-year rally. Meanwhile, the $555 put block trade (OI: 503,697) next Friday shows bears are still on alert.

No Major News, But Sentiment Is Everything Right Now

There’s no recent headline-driven drama for SPY—no earnings, no sector-specific shocks. That means options positioning is being driven by macro forces: inflation fears, Fed whispers, or portfolio hedges. Without news to anchor sentiment, the market is leaning into technical levels and options bets to decide direction. Think of it like a tug-of-war—bears have the weight, but bulls have the leverage at 690.

3 Actionable Trades for Today’s SPY Move

1. Call Play for the 690 Breakout: Buy SPY20251212C690 (next Friday expiry) if SPY closes above $688.39. Why? The 690 strike has 23,432 open contracts—enough liquidity to avoid slippage. Target a 10–15% move by expiry, with a stop just below $685.02.

1. Put Hedge at 670: Buy SPY20251212P670 (next Friday) if SPY dips below 683.2 support. The 200D support at 668.3 adds a psychological floor. This caps downside risk while letting you ride a potential rebound.

1. Stock Buy at 685.4: Enter SPY near $685.4 if it holds above 683.2. Target $692 (Bollinger Upper Band at 692.85) as a first exit. A break below 680 triggers a reevaluation.

Volatility on the Horizon: Bulls vs Bears at the Starting Line

SPY isn’t breaking out—or breaking down—yet. The 685.4 price is stuck in a tight corridor between 30D and 200D moving averages. But here’s the play: if bulls push past 690, the put-heavy positioning could create a short-covering rally. Conversely, a drop below 683.2 might trigger a cascade of stop-loss orders. Either way, the next 72 hours will tell. Keep an eye on the 690 call chain—it’s the canary in the coal mine for a broader market shift.