SPY Options Signal Bullish Bias as 685 Call OI Surges: Here’s How to Play the Upcoming Volatility

• SPY trades at $684.80, up 0.62% with volume surging past 38.5M—nearly double its 30-day average.
• Options market shows heavy call open interest at the $685 and $690 strikes, while puts dominate at $659 and $670.
• Block trades reveal big money buying 6,000 calls at $657 and 5,000 calls at $680 ahead of key expiration dates.

Here’s the takeaway: SPY is perched at a crossroads. Technicals hint at a short-term pullback, but options data screams bullish conviction. With the put/call ratio skewed 1.76 to 1 (favoring puts), the market is hedging downside risks—but call buying at key strikes suggests a breakout is brewing. Let’s break it down.

What the Options Chain Reveals About Market Sentiment

The options market isn’t just numbers—it’s a conversation. Right now, that conversation is loud and clear: traders are stacking the deck for a rebound. Take the SPY20251226C685 call option, which has 5,931 open contracts expiring this Friday. That’s not just noise; it’s a bet that SPY will punch above $685 before the close. Even more telling? The next Friday chain shows SPY20260102C687 with 46,461 open contracts—the largest call position in the chain.

But don’t ignore the puts. The SPY20251226P659 put has 19,786 open contracts, anchoring the downside at ~$659. That’s a 4% buffer from current levels. The block trades amplify this tension: 6,000 calls bought at $657 (SPY20250930C657) and 5,000 at $680 (SPY20251121C680) suggest institutional players are pre-positioning for a rally. The risk? If SPY dips below the 30-day support zone (683.31–684.04), those puts could trigger a cascade of stop-loss orders.

Why News Absence Makes Options the Star

No major headlines have shaken SPY in the past week. That’s not a problem—it’s an opportunity. Without news to sway sentiment, the options market becomes the primary lens for predicting moves. The heavy call buying at $685–$690 implies traders expect SPY to reclaim its 52-week high of $700.36 by January. Think of it like a magnet: the more calls pile into those strikes, the stronger the pull toward that price level.

Actionable Trade Ideas for SPY

For options traders:

• Bullish Play: Buy SPY20251226C685 (this Friday) or SPY20260102C687 (next Friday). The former offers a short-term pop if SPY breaks above $685, while the latter locks in a longer runway for a $687+ move.
• Bearish Hedge: Buy SPY20251226P670 to protect against a drop below $680. The 9,937 open contracts here suggest strong liquidity.

For stock traders:

• Entry: Consider buying SPY near $683.30–$684.04 if the 30-day support holds. A break above $685.36 (today’s high) would validate the bullish case.
• Target: Aim for $693.70 (upper Bollinger Band) if the 200-day MA (622.52) continues its upward trajectory.
• Stop-Loss: Exit if SPY falls below $679.74 (middle Bollinger Band), which could reignite bearish momentum.

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

The coming days will test SPY’s resolve. With RSI at 50.39 (neutral) and MACD trending lower, the short-term bias is mixed—but the options market is leaning all-in on a rebound. If you’re bullish, the SPY20260102C687 call offers a low-risk, high-reward setup. If you’re cautious, the SPY20251226P670 put provides a safety net. Either way, the data points to a pivotal week. Stay close to the 685 level—it might just be the spark SPY needs to ignite a new leg higher.