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Where Is The SPY Headed Next? Options Traders Aren't So Sure Right Now

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Where Is The SPY Headed Next? Options Traders Aren't So Sure Right Now

SPDR S&P500 (ARCA: SPY) pulled back Tuesday after reaching a new all-time high Friday and maintaining it on Monday.

Last Friday an options trader bet $3.78 million that SPY was headed lower and on Tuesday the trader could have already booked a massive profit.

Despite the pullback on Tuesday morning, SPY held a key support level of around $412 and several options traders entered and bet more than $1.42 million, with this marking the temporary bottom.

Another group of options traders disagreed and bet more than $1.09 million SPY is headed lower still.

The bullish SPY options trades: The following options trade is courtesy of Benzinga Pro:

  • At 10:59 a.m., a trader executed a call sweep, above the ask, of 444 SPY options with a $412 strike price expiring on May 12. The trade represented a $113,220 bullish bet for which the trader paid $2.55 per option contract.
  • At 10:59 a.m., a trader executed a call sweep, near the ask, of 556 SPY options with a $412 strike price expiring on May 12. The trade represented a $141,224 bullish bet for which the trader paid $2.54 per option contract.
  • At 10:59 a.m., a trader executed a call sweep, near the ask, of 372 SPY options with a $412 strike price expiring on May 12. The trade represented a $92,256 bullish bet for which the trader paid $2.48 per option contract.
  • At 11:03 a.m., a trader executed a call sweep, near the ask, of 300 SPY options with a $412 strike price expiring on May 17. The trade represented a $116,100 bullish bet for which the trader paid $3.87 per option contract.
  • At 11:16 a.m., a trader executed a call sweep, near the ask, of 600 SPY options with a $415 strike price expiring on May 12. The trade represented a $60,000 bullish bet for which the trader paid $1 per option contract.
  • At 11:16 a.m., a trader executed a call sweep, above the ask, of 400 SPY options with a $415 strike price expiring on May 12. The trade represented a $41,200 bullish bet for which the trader paid $1.03 per option contract.
  • At 11:18 a.m., a trader executed a call sweep, at the ask, of 500 SPY options with a $415 strike price expiring on May 12. The trade represented a $58,500 bullish bet for which the trader paid $1.17 per option contract.
  • At 11:31 a.m., a trader executed a call sweep, near the ask, of 1009 SPY options with a $415 strike price expiring on May 21. The trade represented a $444,969 bullish bet for which the trader paid $4.41 per option contract.
  • At 11:40 a.m., a trader executed a call sweep, near the ask, of 250 SPY options with a $415 strike price expiring on May 21. The trade represented a $110,500 bullish bet for which the trader paid $4.42 per option contract.
  • At 11:36 a.m., a trader executed a call sweep, near the ask, of 500 SPY options with a $415 strike price expiring on May 14. The trade represented a $157,500 bullish bet for which the trader paid $3.15 per option contract.
  • At 11:52 a.m., a trader executed a call sweep, at the ask, of 200 SPY options with a $414 strike price expiring on May 19. The trade represented an $86,000 bullish bet for which the trader paid $4.30 per option contract.

The bearish SPY options trades:

  • At 11:37 a.m., a trader executed a put sweep, near the ask, of 500 SPY options with a $415 strike price expiring on June 18. The trade represented a $498,000 bearish bet for which the trader paid $9.96 per option contract.
  • At 11:39 a.m., a trader executed a put sweep, near the ask, of 200 SPY options with a $415 strike price expiring on June 18. The trade represented a $201,200 bearish bet for which the trader paid $10.06 per option contract.
  • At 11:45 a.m., a trader executed a put sweep, above the ask, of 1,193 SPY options with a $400 strike price expiring on May 28. The trade represented a $394,883 bearish bet for which the trader paid $3.31 per option contract.

Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays the market price for the call option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.

These types of call option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.

SPY Price Action: SPDR S&P500 was trading at $413.13, down 1.15% at last check Tuesday at publication.

(photo: Thomas Richter via Wikimedia Commons)

 

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Posted-In: Broad U.S. Equity ETFs Options Markets Trading Ideas ETFs Best of Benzinga

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