SPY Options Signal Bullish Breakout Potential: Key Strikes and Whale Moves to Watch

• SPY trades at $686.74, up 0.28% with volume surging past 23 million shares
• Put/call open interest ratio hits 1.75, but heavy call OI at $690–$700 hints at bullish positioning
• Block trades show $4.5M bought in SPY20250930C657 and $3.5M in SPY20251121C680

Here’s what’s happening: SPY’s options market is sending mixed signals. While puts dominate open interest, the way calls are clustered near key levels suggests smart money is preparing for a breakout. Let’s unpack why this matters for your trading desk today.

Bullish Whales Are Stacking Calls at $690 and $700

Looking at this Friday’s options chain, the top OTM calls sit at $690 (OI: 29,176) and $700 (OI: 18,511). These strikes form a tight cluster just above SPY’s current price—like a group of investors collectively betting on a short-term pop. The $800 call (OI: 25,315) is an outlier, but its massive open interest suggests some long-term bullish positioning.

Meanwhile, puts at $670 (OI: 25,823) and $668 (OI: 12,653) show hedging activity. But here’s the twist: the next Friday options chain shows even more interesting dynamics. The $687 call (OI: 46,576) is the most popular, sitting just above today’s intraday high. This could be a "soft target" for algorithms to trigger if SPY tests its upper Bollinger Band at $691.19.

Block trades add intrigue. The $4.5 million bought in SPY20250930C657 (a deep ITM call) and $3.5 million in SPY20251121C680 suggest institutional players are locking in bullish exposure. The SPY20260116P645 put sell at $1.1 million is a bearish counterpoint, but it’s a smaller bet compared to the call buying.

No Major News, But Technicals Tell a Story

There’s no recent headline noise about the S&P 500 ETF itself, which means this move is driven by positioning, not fundamentals. That’s actually good news for traders—positioning-driven moves can be more predictable. With RSI at 53.7 and MACD hovering near its signal line, SPY is in neutral territory technically. But the 30-day moving average at $677.08 and 200-day at $623.07 show a clear long-term uptrend.

Actionable Trades for Today

For options players:

• SPY20251226C690 (this Friday’s $690 call): Buy if SPY closes above $687.00. Target $695 for 20%+ gains.
• SPY20260102C687 (next Friday’s $687 call): Buy if SPY holds above $683.88 (intraday low). This is the most liquid next-week contract.

For stock traders:

• Entry near $683.30–$684.04 (30-day support zone). Stop-loss below $681.46 (200-day support).
• Target zone: $691.19 (upper Bollinger Band) or $695 (key call cluster).
• Bearish counter: SPY20260102P670 (next Friday’s $670 put) if SPY breaks below $681.03 (middle Bollinger Band).

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

This is a classic setup where options market sentiment and technicals align. The heavy call buying at $690–$700 creates a self-fulfilling prophecy—if enough traders are long those strikes, SPY is more likely to reach them. But don’t ignore the puts: that 1.75 put/call ratio means bears are still on alert. My advice? Treat this as a bullish breakout play with tight stops, but keep a small put position as insurance. The next 72 hours could tell us whether this is a holiday rally or just a pre-Christmas bounce.