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Powell Hints at No Rush to Cut Rates, Yet Markets Grow More Bullish

@OptionsBB
After Fed Chair Powell hinted that the central bank is not in a rush to cut rates, U.S. Treasury yields rose on Tuesday (16th), with the 2-year yield briefly touching 5%. U.S. stocks were volatile before closing mixed, with the S&P 500 and Nasdaq Composite falling for the third straight day, while the Dow Jones snapped a six-day losing streak, led by UnitedHealth. Options trading data shows diverging investor expectations for the future. SPY options reflect a slightly bullish sentiment, with investors betting on limited upside in the short-term. QQQ options have been bullish on June far-dated calls for two straight days, though remaining bearish near-term. For the small-cap Russell 2000 ETF, investors are primarily defensive, selling put options. Details: $SPDR S&P 500 ETF Trust(SPY)$ options overall showed a slightly bullish trading sentiment, with sellers of put options dominating. Open interest in call options grew rapidly, rising 5.7% over the past 5 days. Open put contracts remained above the 52-week average. For call options, newly opened positions were mainly for options expiring this week, with longer-dated ones quiet. The most actively traded new open interest was the $SPY 20240417 510.0 CALL$ , with a 510 strike expiring April 17th, adding 9,003 contracts. The most newly bought put option was the $SPY 20240621 455.0 PUT$ , with a 455 strike expiring June 21st, adding 14,000 contracts, implying expectations for the S&P 500 ETF to fall 9.5% by June 21st. For the $SPY 20240426 485.0 PUT$ , the main position was selling, suggesting expectations for the S&P 500 ETF to fall less than 3.9% by April 26th. The $Invesco QQQ Trust-ETF(QQQ)$ options overall showed a slightly bearish trading sentiment, with buyers of call options temporarily leading. Open interest in call options grew rapidly, rising 9.9% over the past 5 days. For call options, following Tuesday, investors continued to buy the most $QQQ 20240621 530.0 CALL$ , with the 530 strike expiring June 21st, adding 9,880 contracts, indicating expectations for QQQ to rise about 22% by June 21st. For put options, investors bought the most new $QQQ 20240426 425.0 PUT$ , with a 425 strike expiring April 26th, adding 12,000 contracts, implying expectations for QQQ to fall 15% by April 25th. The $iShares Russell 2000 ETF(IWM)$ options overall showed a slightly bullish trading sentiment, with sellers of put options dominating. Both call and put open interest grew rapidly, far exceeding 52-week averages. For call options, investors bought the most $IWM 20240621 220.0 CALL$ , with a 220 strike expiring June 21st, adding 10,000 contracts, mainly traded during after-hours, indicating expectations for IWM to rise about 12% by June 21st. For put options, investors sold the most new $IWM 20240517 184.0 PUT$ , with a 184 strike expiring May 17th, adding 72,000 contracts, implying expectations for IWM to fall less than 7.3% by May 17th.
Powell Hints at No Rush to Cut Rates, Yet Markets Grow More Bullish

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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