SPY Options Signal Deep Put Skew and Whale Moves: Here’s How to Navigate the 680–700 Range

• Put open interest dominates at $505 and $555 strikes, with total put/call OI ratio at 2.07 (bearish bias).
• Block trades hint at big money moves: 6,000 calls bought at SPY20250930C657 and 750 puts sold at SPY20260116P645.
• Technical setup is mixed: SPY sits near 30D support (683.21) but MACD (3.31) and RSI (60.8) suggest short-term bullish momentum.

The SPY options market is painting a picture of caution. While technicals hint at a potential rebound, the massive put skew—especially at extreme OTM strikes like $505—suggests institutional players are hedging against a sharp drop. But here’s the twist: the top call strikes ($700, $690) show enough bullish conviction to keep the ETF in a tight trading range. Today’s key question: Will SPY break out above 686.64 (intraday high) or crumble below 683.20 (30D support)?

"Put Overload at $505 and Call Heat at $700: What It Means for Your Strategy"

The options data tells two conflicting stories. On one hand, the SPY20251212P505 put (OI: 216,206) and SPY20251219P505 (OI: 216,206) are the most heavily bet against the ETF in history. These strikes are 16% below current price—deep enough to imply panic but not so far that they’re ignored. On the other hand, the SPY20251212C700 call (OI: 15,285) and SPY20251219C700 (OI: 100,513) show aggressive bullish positioning.

The block trades add intrigue. A 6,000-lot buy of SPY20250930C657 (strike $657, expiring in September) suggests someone is locking in long-term bullish exposure. Meanwhile, the sale of SPY20260116P645 (a $645 put expiring in January 2026) indicates a bet that SPY won’t collapse below that level.

"News Flow: SPY’s Best Friend or Foe?"

The recent news cycle is a mixed bag. Carvana’s S&P 500 inclusion should boost SPY’s demand, while Deutsche Bank’s 8,000 target (SPY at ~$727) fuels optimism. But Warren Buffett’s SPY sell-off and Stifel’s 6,350 bear case (SPY at ~$635) add friction. The key takeaway? SPY’s performance is now a proxy for broader market sentiment. If AI-driven earnings growth holds, SPY could test 7,200 by December. If not, the 6,350 level becomes a psychological anchor.

"3 Trades to Play the 680–700 Battle"

1. Bull Call Spread: Buy SPY20251212C690 (OI: 11,035) at $12.50 and sell SPY20251212C700 (OI: 15,285) at $8.50. This caps risk at $4 per share but targets a 6.5% return if SPY closes above $698 by Friday.
2. Put Hedge: Buy SPY20251219P680 (OI: 22,609) at $15.20 if SPY dips below 683.20. This protects against a drop to 668.30 (200D support).
3. Stock Entry: Buy SPY near $683.20 (30D support) with a stop-loss at 681.50. Target 690.00 (RSI 60.8 suggests momentum) and 695.00 (MACD histogram at 1.68 implies strength).

"Volatility on the Horizon: What to Watch Next"

The next 48 hours will test SPY’s resolve. A close above 686.64 (intraday high) could trigger a rally toward 695.00 (Bollinger Upper Band at 694.29). But a breakdown below 683.20 (30D support) might force a retest of 672.12 (200D support). Either way, the options market is pricing in a 10–15% move by December 19. For traders, this is a high-probability setup—just be ready to adjust as the 2026 earnings season looms.

The bottom line? SPY is caught between bullish technicals and bearish options positioning. But the block trades and news flow suggest a range-bound battle ahead. Play it smart: use the 680–700 range as your battleground, and let the data guide your next move.