SPY Options Signal Bullish Momentum: Key Strikes and Whale Moves to Watch for Holiday Trading

• SPY trades at $690.74, up 0.4% with volume surging past 26.4 million shares.
• Put/call open interest ratio hits 1.68, showing heavy hedging at $659–$687 strikes.
• Block traders bought 6,000 SPY20250930C657 calls and sold 750 SPY20260116P645 puts this week.

Here’s the takeaway: SPY is perched on a technical bull setup with options data showing a tug-of-war between cautious hedgers and aggressive bulls. The price action suggests a potential breakout above key resistance—but the puts tell a story of lingering caution. Let’s break it down.

Bullish Pressure vs. Downside Protection: Decoding the Options Imbalance

The options market is split. For this Friday’s expirations (Dec 26), OTM calls peak at $800 (OI: 25,315) while puts dominate at $659 (OI: 19,636). Next Friday’s chain shows even more intrigue: calls at $698 (OI: 25,548) and puts at $667 (OI: 15,416) form a tight battle zone. The 1.68 put/call OI ratio isn’t just a number—it’s a warning that institutional players are bracing for volatility.

But here’s the twist: block traders are making big moves. The $4.5 million buy of SPY20250930C657 calls (strike $657, expiring Sept 30) suggests someone’s banking on a sustained rally. Meanwhile, the $1.1 million sale of SPY20260116P645 puts (strike $645, expiring Jan 16) hints at a bearish hedge for a potential January selloff. These whale trades amplify the tension between near-term optimism and long-term caution.

No Major News, But Technicals Tell a Story

There’s no recent headline noise about SPDR S&P 500 ETF Trust itself, but the technicals are loud. The RSI at 54.5 and MACD hovering near its signal line suggest SPY is in a consolidation phase—like a coiled spring. Bollinger Bands show the upper rail at $690.80 (current price is kissing it), while the 200D MA at $623.70 feels like a distant memory. Without fundamental catalysts, traders are projecting macro bets (inflation fears? Fed hints?) onto SPY’s options chain.

Actionable Trades: Calls for the Bold, Puts for the Pragmatic

For options players, the most compelling setup is the SPY20260102C698 call (strike $698, expiring Jan 2). With SPY currently at $690.74, this $7.26 out-of-the-money strike offers leveraged exposure if the ETF breaks above its 30D support cluster ($683.30–$684.04). A better-risk-reward alternative: the SPY20260102P667 put (strike $667) as insurance against a drop below the 200D MA. Both have solid open interest to ensure liquidity.

Stock traders should watch two levels:

• Entry: Consider buying SPY near $683.30 (lower end of 30D support) if it holds above the 200D MA.
• Target: Aim for $690.80 (Bollinger upper band) as a short-term ceiling, with a stretch goal at $701 (intraday high of 2025).

Volatility on the Horizon: Positioning for the Post-Holiday Move

The next 10 days will test SPY’s resolve. If the ETF holds above $681.46 (200D support zone), the bullish case gains steam. But don’t ignore the puts—they’re a reminder that a breakdown below $673.19 (lower Bollinger band) could trigger a wave of stop-loss orders. For now, the options data says this: bulls are ready to push higher, but bears aren’t backing down. Your call—will you ride the momentum or hedge the uncertainty?