SPY, QQQ: Key Trading Levels Factored In By Options Market Amid Debt-Ceiling Impasse

U.S. markets have so far managed to avoid any sharp negative reaction despite Congress failing to find a decisive outcome yet in regard to the debt ceiling crisis. In fact, markets registered gains on Wednesday as investors and traders began pricing in a positive outcome to the political impasse over the borrowing limit. Under these circumstances, here's a look at crucial support and resistance levels priced in by the options market for the following exchange-traded funds:

1. SPDR S&P 500 ETF Trust SPY: The ETF closed Wednesday's session 1.21% higher at $415.23, according to Benzinga Pro. Options expiring on Friday indicate there is a significant open interest build-up at the $420 Call strike, indicating the level could provide a stiff resistance in the short term. On the downside, the $410 Put strike indicates strong open interest accumulation, indicating the level is expected to provide the first level of support. The $400 mark appears to have the strongest conviction bets of being a support level in case of an intensified sell-off.

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2. Invesco QQQ Trust Series 1 QQQ: The ETF gained 1.21% to close at $331.12 on Wednesday. Options expiring on Friday indicate significant open interest accumulation at the $335 Call strike, indicating the level could act as the first line of resistance in the short term. On the downside, the $315 level is expected to act as a support in the near term.

Open interest levels only provide a fair idea about support and resistance. Any major news break or macro event may lead to significant movement in asset prices and a subsequent change in open interest levels.

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