Options Spy | Big bets on a 3.6% drop in the S&P 500 Put options are far more bullish

Treasury rates continued to rise after strong economic data and rising oil prices raised concerns that the Federal Reserve may need to keep interest rates higher for longer. The Dow and S&P posted their biggest one-day losses in four weeks.

• Overall trading in the S&P 500 options market showed a slightly bullish intent, but put open interest continued to grow well above call interest.

• Big players in the options market, mainly by taking long put options 460-500 spread portfolios, suggest they expect the S&P 500 to fall at least 3.6 percent over the next 24 days.

• Although the overall option trading intention is slightly bullish, the big users are clearly doing long-month put options and holding cautious and even bearish expectations for the future market.

Details:

SPY Option Evaluation Shows Slightly Bullish Trading Intentions, But Put Open Interest Continues Growing, Far Exceeding Calls

The top new call opener was the $SPY 20240408 530.0 CALL$  with a 530 strike expiring April 8th, seeing 32,000 new openings. The top new put opener was the $SPY 20240426 460.0 PUT$  with a 460 strike expiring April 26th, with 30,000 new openings.

The top two new put openers were combination trades: Buying the $SPY 20240426 500.0 PUT$  and selling the $SPY 20240426 460.0 PUT$ . Calculated from the closing price of 518.8, this implies expectations of at least a 3.6% decline in the S&P 500 over the next 24 days.