SPY Options Signal Defensive Play: Put/Call Ratio Hints at 684 Support Battle as 2026 Earnings Loom

• SPY trades at $684.41, down 0.38% from its 687.01 close—testing 200D support at 682.62.
• Put/open interest dominates 1.85x, with 60k+ contracts at 684 and 672 strikes ahead of Friday’s expiry.
• Block traders just bought 6k SPY20250930C657 calls—hinting at stealth bullish positioning.

Here’s the thing: SPY isn’t just drifting. The options market is whispering a story of a defensive battle near 684, with heavy put open interest and block trades suggesting smart money is bracing for a rocky start to 2026. Let’s break it down.

Where the Money Is Flowing: Puts at 684, Calls at 693

The put/call ratio of 1.85 (open interest) isn’t just a number—it’s a red flag. For this Friday’s expiry, 60k puts at 684 and 672 are like a wall of caution. Think of it as a crowd hedging against a potential drop below the 200D MA (682.62). But here’s the twist: the top call strikes ($687, $690) show enough bullish energy to suggest a rebound isn’t out of the question.

Block trades add intrigue. The 6k purchase of SPY20250930C657 calls (a deep-in-the-money contract) feels like a stealthy bet on long-term stability. Meanwhile, the SPY20260116P645 sell put block—750 contracts at a 645 strike—hints some players are selling protection for January. It’s a mixed message: defend the downside but don’t rule out a rally.

No News, But the Market Is Talking

There’s no recent headline noise about the S&P 500 ETF itself, but the options activity tells its own story. When there’s no earnings report or macro shock to point at, the put/call ratio and block trades become your best clues. The heavy put interest suggests investors are pricing in volatility from broader macro factors—Federal Reserve signals, China trade data, or tech sector jitters. Without a clear catalyst, this could mean a sideways grind… until something breaks the stalemate.

Your Playbook: Puts for Defense, Calls for a Counterattack

If you’re playing it safe, the SPY20260102P684 put (47k open interest) is your insurance policy. With SPY hovering near that strike, it’s cheap protection if the 200D MA cracks. For the bold, the SPY20260109C693 call (47k OI) offers a leveraged play if the ETF reclaims its 30D support at 687.35.

For stock traders:

• Entry near $683–685 if the 200D support holds—aim for a rebound toward the 693.47 upper Bollinger Band.
• Stop-loss below 680 to avoid a breakdown into 674.24 (lower Bollinger).

Volatility on the Horizon: A January Crossroads

SPY’s at a crossroads. The 684 level isn’t just a number—it’s a psychological battleground. If the puts win, we could see a test of 667 (next key level). But if the calls gain traction, the 690–700 range becomes a new floor. Either way, the options market is pricing in a January reckoning. Keep your eyes on the 684–687 range—it’s where the next chapter starts.