SPY Options Signal Bullish Bias: Key Strikes and Block Trades Point to Strategic Entry Zones

• SPY trades at $688.54, clinging to a short-term bullish trend with RSI hovering near 54.5.
• Put/call open interest ratio sits at 1.75, highlighting heavy defensive positioning below $680.
• Block trades show $4.5M poured into SPY20250930C657 calls and $2.4M in SPY20250916P680 puts.

Here’s the takeaway: SPY’s options market is painting a picture of cautious optimism. While puts dominate for hedging, calls at extreme strikes hint at bullish bets. With the ETF sitting just above its 30-day moving average, today’s action suggests a pivotal moment for traders ready to act.

Where Institutional Money Is Flowing

Let’s start with the elephant in the room: that 1.75 put/call open interest ratio. For this Friday’s expirations, puts like the $659 strike (OI: 19,636) and $680 (OI: 15,542) are bristling with defensive energy. But don’t overlook the calls—$800 strikes (OI: 25,315) might seem absurdly high, but they represent a small but vocal group betting on a holiday rally.

The real story? Next Friday’s options chain. Calls at $690 (OI: 34,974) and $698 (OI: 25,548) are quietly accumulating steam. These strikes sit just above current price levels, suggesting smart money is positioning for a post-holiday rebound. Contrast that with puts at $667 (OI: 15,416)—a level that, if breached, could trigger cascading stop-loss activity.

Block trades add intrigue. The $4.5M bought into SPY20250930C657 (a call expiring Sept 30) looks like a hedge against a prolonged rally. Meanwhile, the $2.4M dump into SPY20250916P680 puts suggests some big players are bracing for a mid-September correction. It’s a mixed message, but the call purchases signal conviction.

The News Gap and Market Sentiment

No major headlines have shaken SPY in the past week—a vacuum that lets technicals and options data take center stage. Without earnings reports or Fed drama to sway sentiment, traders are left reading the tea leaves of institutional positioning. This quiet environment actually works in favor of options strategies, since it reduces noise around entry points.

But here’s the catch: SPY’s 200-day moving average ($623.70) is still a distant anchor. While the 30-day support zone (683.31–684.04) feels sturdy today, a breakdown below 681.46 (the 200D support) could turn cautious puts into desperate ones. Investor psychology is fragile when it comes to broad-market ETFs—perception can move the needle faster than fundamentals sometimes.

Actionable Trade Setups

For options traders:

• Bullish Play: Buy SPY20260102C690 calls (next Friday’s expiration). With the ETF hovering near $688.50, a push above 690 could trigger momentum trades. Target a 5-7% move before expiration.
• Bearish Hedge: Sell SPY20260102P667 puts if price dips to 683.30. The heavy OI at this level creates a magnet-like pull—ideal for collecting premium if support holds.

For stock traders:

• Entry Alert: Consider buying SPY near $683.50 if price tests the 30-day support zone. Set a tight stop below 681.46.
• Target Zone: First resistance sits at 687.80 (today’s intraday low), with a breakout target at 690.79 (Bollinger Upper Band). A close above 691 would validate the bullish case.

Volatility on the Horizon

The next 72 hours will test SPY’s resolve. With volume ticking higher and Bollinger Bands widening, we’re entering a phase where directionality matters more than consolidation. The key question: Will the $690 level act as a magnet or a mirror? My bet? A holiday-driven pop is in play, but don’t ignore the puts—they’re whispering caution. Stay nimble, keep stops tight, and let the options Greeks do the heavy lifting.

One last thought: This isn’t just about SPY. The ETF is a barometer for the S&P 500’s health. If it holds, the broader market likely follows. If it breaks… well, that’s when the real trading opportunities emerge.