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

• SPY trades at $685.17, down 0.27% from its 2025 closing high of $687.01
• Options open interest shows a 1.85 put/call ratio, with heavy put activity at $684 and $672
• Block trades reveal $4.5M bought in SPY20250930C657 and $3.5M in SPY20251121C680

The SPDR S&P 500 ETF (SPY) is sitting at a crossroads today. Technicals show a short-term bullish trend with MACD (3.18) above its signal line, while options activity tells a more nuanced story. The key takeaway? A bearish hedge is in play, but bulls remain in control of the narrative.

What Options Activity Reveals About Market Sentiment

The options chain paints a picture of cautious optimism. For this Friday’s expiration (2026-01-02), puts at $684 (OI: 60,693) and $672 (OI: 60,069) dominate open interest—suggesting institutional players are hedging against a potential pullback. But here’s the twist: calls at $687 (OI: 44,063) and $690 (OI: 42,277) show strong near-term bullish conviction.

Looking at block trades adds context. A $4.5 million purchase of SPY20250930C657 (expiring Sept 30) and a $3.5 million buy of SPY20251121C680 (Nov 21 expiry) indicate big players are locking in upside potential. The largest put block—SPY20260116P645 (sell put, $1.1M)—hints at bearish positioning for January, but it’s dwarfed by the overall call bias.

News Flow Validates the Bull Case

SPY’s 18.6% gain in 2025—driven by AI spending and Fed rate cuts—has created a self-fulfilling prophecy. The ETF’s resilience during the April tariff crisis (where it gained 21% post-Trump’s pause) shows retail investors have learned to exploit volatility. Now, with Bollinger Bands showing the price is trading near the middle band ($683.85), there’s room to run if the 200D MA (626.34) continues its catch-up rally.

Actionable Trade Ideas for Today

For options traders, the most compelling setups are:

• Bull Call Spread: Buy SPY20260102C690 (strike $690, expiry Jan 2) and sell SPY20260102C700. The $690 strike sits just below the 30D support level (687.35–688.11), giving you a 4.2% buffer if price consolidates.
• Bear Put Hedge: Buy SPY20260109P672 (strike $672, expiry Jan 9) to protect against a break below the 200D support (682.62–686.50). This strike aligns with the upper bound of the 100D MA (666.48).

For stock traders, consider:

• Entry near $682.62 if SPY holds above its 200D support zone. Target $688.11 (30D resistance) as a first exit point.
• Aggressive longs could dip below $684.18 (today’s low) with a stop-loss at $682.62. A break above $687.36 (intraday high) would validate the bullish case.

Volatility on the Horizon

The next 72 hours will test SPY’s resolve. With RSI at 54.29 (neutral territory) and volume surging to 25.9M shares, the ETF is primed for a directional move. If the 30D support holds, we could see a retest of the 200D MA—now acting as dynamic support—as early as next week. The real question: Will the heavy put activity at $672 force a retreat, or will the call-heavy positioning propel SPY toward its 2025 highs?

Either way, the options market has handed us a roadmap. Bulls have the edge, but hedging is smart in this environment. Stay nimble, and watch those key strikes like a hawk.