SPY Options Signal Deep Bearish Sentiment: How to Hedge or Profit from $680 Put Pressure and $700 Call Contention

• SPY’s put/call open interest ratio hits 2.33, with $680 puts dominating bearish positioning ahead of Friday’s expiry.
• Block trades show whales selling June 2026 puts at $650 and buying June 2026 calls at $740—betting on a volatile summer.
• Recent earnings beat and ESG product launch offset SEC scrutiny, but technicals hint at a critical support test at $682.

Here’s the takeaway: SPY is caught in a tug-of-war between short-term bearish options positioning and long-term bullish fundamentals. The data screams caution for downside risks, but the ETF’s recent resilience in a low-rate environment offers a counterplay for strategic traders.

Bullish Bears and the $680 Put Overhang

The options market is a study in contrasts. While SPY’s 30-day support sits at $681.37, open interest for the $680 put (OI: 125,421) dwarfs even the most bullish call strikes. This isn’t just bearish—it’s a warning shot. Think of it like a dam holding back a river: if SPY breaks below $682, those puts could trigger a cascade of stop-loss orders and forced selling.

But there’s nuance. The top OTM calls—$700 (OI: 45,142) and $705 (OI: 42,430)—show lingering conviction in a rebound. Block trades like SPY20260618P650 (1,000 puts sold) and SPY20260618C740 (1,000 calls bought) suggest big players are hedging for a summer of volatility. They’re not just bearish—they’re preparing for a storm.

News That Could Flip the Script

SPY’s fundamentals are a mixed bag. The Q4 earnings beat and $500M buyback are textbook bullish moves, and the new ESG variant taps into a $2.5T market. But the SEC’s index rebalancing review adds a wildcard. Retail investors might shrug, but institutional players could pull back until clarity arrives.

Here’s the kicker: the crypto-linked derivative and global distribution partnership are long-term plays. They won’t fix today’s $680 put pressure, but they do reinforce SPY’s role as a market proxy. If the S&P 500 rallies on Fed rate-cut hopes, SPY’s low expense ratio could attract inflows—just not fast enough to counteract near-term bearish options flows.

Actionable Trades for Today’s Volatility

For options traders, the $680 put (SPY20260116P680) is a high-impact play. If SPY holds above $685, consider selling this put for a premium of ~$12/share. The risk? A break below $682 triggers a stop-loss. Alternatively, a call spread using the $697 call (SPY20260116C697) and $705 call (SPY20260116C705) could profit from a rebound, with limited downside if the ETF consolidates.

Stock traders should watch $685.26 (middle Bollinger Band) as a key entry level. If SPY retests this level and holds, target a move back to $695.39 (intraday high). But if the 200D MA at $630.55 starts to loom, consider shorting or buying the $650 put (SPY20260618P650) for a longer-term hedge.

Volatility on the Horizon

SPY’s next 48 hours will test whether the ETF can hold its 30D support at $681.37. A close above $690.68 (today’s open) would signal short-covering relief, but a breakdown below $673.76 (lower Bollinger Band) could invite a wave of panic selling. The block trades in June 2026 options suggest volatility isn’t ending—it’s just shifting shape. For now, the path of least resistance is sideways consolidation, but the $680 put wall looms like a storm cloud.