To The Moon

Earlier, the latest data showed that the pace of inflation in the United States was in line with expectations, which raised hopes for the Federal Reserve to cut interest rates.

Options flows showed expectations for SPY to see limited downside below 1.5% by June 7 expiration. QQQ was expected to hold above 430 by June 21. For small-caps, the expectation was for the Russell 2000 to see a drawdown capped below 6.8% through September, with upside limited to 2.8%.

Details:

The S&P 500 ETF (SPY) saw open call interest rise 2.5% over the past 5 days. Open put contracts increased 0.6% over the same period.

For call options, the most actively traded was the $SPY 20240731 580.0 CALL$  with a 580 strike, adding 37,000 contracts.

For put options, the most actively traded was the $SPY 20240719 497.0 PUT$  with a 497 strike, adding 36,000 contracts.

The Nasdaq 100 ETF (QQQ) saw open call interest rise 2.9% over the past 5 days. Open put contracts increased 1.1% over the same period.

For call options, investors bought the most $QQQ 20240621 430.0 CALL$  with a 430 strike, adding 9,400 contracts as part of a reversal strategy vs the $QQQ 20240621 430.0 PUT$ . This implied expectations for QQQ to hold above a 4.6% drawdown by June 21 expiration.

The Russell 2000 ETF (IWM) saw open call interest rise 1.5% over the past 5 days, while open put contracts increased 1.2% over the same period.

For call options, investors sold the most $IWM 20240719 214.0 CALL$  with a 214 strike, adding 7,007 contracts. This capped expectations for further IWM upside below 4.9% by July 19 expiration.

For put options, there was heavy buying in the $IWM 20240719 195.0 PUT$  with a 195 strike, adding 39,900 contracts. This priced in a 4.4% decline for IWM by July 19 expiration.