SPY Options Signal Deep Put Bias Amid Bullish Technicals: Key Strikes and Whale Moves to Watch for Dec 12 Trading

• SPY plunges 1.1% to $681.48, breaking below its 30-day moving average of $676.57
• Put/call open interest ratio hits 2.02, with puts dominating at extreme strikes like $555
• Block traders are buying 6,000 SPY20250930C657 calls and 1,220 SPY20250916P680 puts

Here’s what’s happening: SPY’s options market is screaming about a potential short-term selloff, even as technicals suggest the long-term trend remains intact. The key question is whether this volatility will carve out a new support level or trigger a deeper pullback. Let’s break it down.

The Options Imbalance: Fear at the Fringes

SPY’s options chain is a study in extremes. This Friday’s put open interest is dominated by ultra-deep strikes like $555 (504,253 contracts) and $515 (251,845), while call activity peaks at $700 (30,262) and $690 (24,594). This isn’t just bearish—it’s terrified. The put/call ratio of 2.02 means traders are hedging against a catastrophic drop, not just a minor correction.

But here’s the twist: The next Friday’s call options show a surge at $700 (102,724 OI), suggesting some big players are quietly buying protection for a potential rebound. Meanwhile, block traders are piling into SPY20250930C657 (buying 6,000 contracts) and SPY20250916P680 (1,220 puts). These moves hint at a battle between bears eyeing a breakdown and bulls bracing for a bounce.

The Bull Case: Technicals Aren’t Giving Up

Despite the options panic, SPY’s technicals tell a different story. The RSI at 88.02 screams overbought, but the MACD (4.20) and long-term moving averages (200D at $619.65) suggest upward momentum isn’t dead. Bollinger Bands show the price is near the lower band at $653.89, a classic setup for a mean reversion trade. And don’t forget—SPY’s 30D support/resistance zone (683.31–684.04) could act as a short-term floor.

Actionable Trades: Where to Play This Setup

For options traders, the most compelling plays are:

• Bullish: Buy SPY20251219C685 (30,190 OI) if SPY holds above $683.30. Target: $690–$700
• Bearish: Buy SPY20251219P670 (36,600 OI) if the price breaks below $679.17. Stop loss: $681.48
• Neutral: Sell SPY20251219P650 (94,152 OI) as a volatility play if the ETF stabilizes

For stock traders, consider:

• Entry near $683.30 (30D support) with a stop below $679.17
• Target zone: $690–$695 if the 100D average ($660.40) holds

Volatility on the Horizon

This is a high-stakes chess game. The options market is pricing in a worst-case scenario, but technicals suggest a rebound is possible if SPY holds key levels. The coming days will test whether this is a temporary dip or the start of a broader correction. Either way, the $680–$690 range is where the action will unfold—and where the biggest opportunities lie.