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Straddle Combination Open Interest Warning of Major QQQ Volatility, Over 3.7%!

@OptionsBB
Market attention has shifted towards earnings season, with the U.S. stock market extending its rally. Spotify's stock surged 11.4% after exceeding Wall Street's first-quarter expectations and issuing an optimistic second-quarter guidance. Delivery giant UPS rose 2.4% after beating profit forecasts. Option market data shows that S&P 500 options continue to bet on far out-of-the-money put options, with call open interest shrinking, expecting a 5% decline over the next 2 months. QQQ options continue to bet on far out-of-the-money puts, expecting volatility over 3.7% before May 17th. Small-cap Russell 2000 options continue to add far out-of-the-money put positions, anticipating a potential 4.5% decline by June. Details: $SPDR S&P 500 ETF Trust(SPY)$ options composite trade intent is bullish, with put selling dominating. Call open interest has decreased -9.1% over the past 5 days. Put open interest has declined -14.2% over 5 days. For calls, investors bought the most $SPY 20240503 525.0 CALL$ , strike 525, expiring May 3rd, adding 8,992 new contracts, expecting a 3.9% gain before May 3rd. For puts, the most bought was $SPY 20240621 480.0 PUT$ , strike 480, expiring June 21st, adding 36,000 new contracts, forming a put spread with $SPY 20240621 460.0 PUT$ , anticipating the S&P 500 ETF will decline 4.9% by June 21st. $Invesco QQQ(QQQ)$ options composite trade intent is bullish, with put selling dominating. Call open interest decreased -5.7% over the past 5 days. Put open interest declined -6.8% over 5 days. For calls, investors bought the most $QQQ 20240517 425.0 CALL, strike 425, expiring May 17th, adding 16,000 new contracts, forming a straddle combination with $QQQ 20240517 425.0 PUT, indicating expectation of over 3.7% volatility in QQQ before May 17th. For puts, the most traded was $QQQ 20240503 400.0 PUT, strike 400, expiring May 3rd, adding 17,000 new contracts, suggesting expectation of a 6% decline in QQQ before May 3rd. $iShares Russell 2000 ETF(IWM)$ options composite trade intent is bullish, with put buying dominating. Call open interest declined -15.2% over the past 5 days, put open interest declined -5.6% over 5 days. For calls, investors bought the most $IWM 20240510 221.0 CALL$ , strike 221, expiring May 10th, adding 17,000 new contracts, forming a call spread with $IWM 20240510 213.0 CALL$ , implying expectation of IWM upside capped below 8% by May 10th. For puts, investors heavily bought $IWM 20240621 188.0 PUT$ , strike 188, expiring June 21st, adding 7,155 new contracts, implying expectation of a 4.5% decline in IWM by June 21st.
Straddle Combination Open Interest Warning of Major QQQ Volatility, Over 3.7%!

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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