SPY, QQQ: As S&P 500, Nasdaq Nudge 9-Month Highs, Here's The Options Market Outlook For These ETFs

Wall Street has so far maintained a calm despite the debt ceiling crisis extending into the fourth week of May. The Nasdaq Composite is hovering around highs seen in August while the S&P 500 managed to nudge its 9-month peak levels.

The question remains how long will the market withstand the political stand-off that appears to overlook the sense of urgency for a resolution. Under these circumstances, the options market tends to give a better clarity about immediate expectations of traders. Here's a look at what it indicates about the following exchange traded funds:

1. SPDR S&P 500 ETF Trust SPY: The ETF ended 0.04% higher on Monday at $418.79. Options expiring on Friday indicate significant open interest accumulation at the $423 Call strike, indicating the level could act as a stiff resistance in the short term. On the downside, traders appear to be factoring-in the $415 level as a near-term support.

Also Read: Best S&P 500 ETFs

2. Invesco QQQ Trust Series 1 QQQ: The ETF closed Monday's session 0.34% higher at $337.64. Options expiring on Friday indicate significant open interest accumulation at the $338 Call strike. The level being closer to Monday's closing price indicates traders may be considering limited upside for the ETF in the near term. On the downside, the $335 level may act as a first line of support. If the level is breached on the downside, traders will be eyeing the $330 level to hold the fort during a sell-off.

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

Read Next: Jamie Dimon Thinks Everyone Should ‘Be Prepared’ For Interest Rates Going Up From Here

Market News and Data brought to you by Benzinga APIs
Posted In: NewsBroad U.S. Equity ETFsOptionsMarketsETFstrading
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!