Last week here I showed where there would likely be call resistance on SPY prior to expiration. At the start of the week SPY blew through the high call resistance with strong breadth and never looked back. It was one of the first times in a while SPY was able to make such a leap through very high Wednesday calls. As I’ve said before, when that happens it usually means SPY is very bullish and not something worth fighting. Once SPY went ex-divedend it did pin on Friday. OPEX week (especially a quad witching one) will often make larger than expected moves and the next couple of weeks will likely be important to determine if there is follow through.
Open Interest:
SPY-W: (42 of 53 pins since Wednesday expiration inception).* The current best pin for Wednesday expiration is 248.5-249. There is decent put support at 248 and some call resistance, but to a lesser extent at 250. Should SPY fall below 248 or even fill the gap at 247.11 before Wednesday then it provides a good short term buying opportunity to pin back above that level. The longer SPY takes to get over 250 next week (if it doesn’t gap and go over it) the more 250 calls will build up making it harder to get over that price by Wednesday expiration. A gap and go over that level on strong internals would again be difficult to fight.
SPY-F: (33 of 47 pins since I began tracking Friday’s).* There is quite a large range here with lots of put support all the way down at 241 and 243 and a decent amount of call resistance at 250 and 252. As of now (but can easily change prior to Friday) the best pin is 249. Under 249 there is put support all the way to 246, but it’s not large enough that a materially weak market couldn’t easily get through. To the upside, if price gets over 250, but those calls never close out then there is a decent chance price falls back to close under 250 by Friday expiration. Similar to what I said about Wednesday, the longer SPY stays under 250 (or stalls near there) the more calls will build up making it harder to rally as the week goes on. 
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Pinning stuff:
*An explanation as to how I define pinning can be found here. More information about what pinning is can be found under the education section of my site.
Wednesday 9/13: Failed pin to the upside. 
Friday 9/15: Successful pin. 
Tags: max pain, open interest, option trading, options, pinning, SPX, stock market, stock trading
Insights from the Open Interest for Next Week
Last week here I showed where there would likely be call resistance on SPY prior to expiration. At the start of the week SPY blew through the high call resistance with strong breadth and never looked back. It was one of the first times in a while SPY was able to make such a leap through very high Wednesday calls. As I’ve said before, when that happens it usually means SPY is very bullish and not something worth fighting. Once SPY went ex-divedend it did pin on Friday. OPEX week (especially a quad witching one) will often make larger than expected moves and the next couple of weeks will likely be important to determine if there is follow through.
Open Interest:
SPY-W: (42 of 53 pins since Wednesday expiration inception).* The current best pin for Wednesday expiration is 248.5-249. There is decent put support at 248 and some call resistance, but to a lesser extent at 250. Should SPY fall below 248 or even fill the gap at 247.11 before Wednesday then it provides a good short term buying opportunity to pin back above that level. The longer SPY takes to get over 250 next week (if it doesn’t gap and go over it) the more 250 calls will build up making it harder to get over that price by Wednesday expiration. A gap and go over that level on strong internals would again be difficult to fight.
SPY-F: (33 of 47 pins since I began tracking Friday’s).* There is quite a large range here with lots of put support all the way down at 241 and 243 and a decent amount of call resistance at 250 and 252. As of now (but can easily change prior to Friday) the best pin is 249. Under 249 there is put support all the way to 246, but it’s not large enough that a materially weak market couldn’t easily get through. To the upside, if price gets over 250, but those calls never close out then there is a decent chance price falls back to close under 250 by Friday expiration. Similar to what I said about Wednesday, the longer SPY stays under 250 (or stalls near there) the more calls will build up making it harder to rally as the week goes on.
Promotional stuff: If you are a short term trader and have been struggling or you just want to up your game and learn how to incorporate open interest and technical analysis then you want to join SassyOptions Premium services.
Pinning stuff:
*An explanation as to how I define pinning can be found here. More information about what pinning is can be found under the education section of my site.
Wednesday 9/13: Failed pin to the upside.
Friday 9/15: Successful pin.
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Tags: max pain, open interest, option trading, options, pinning, SPX, stock market, stock trading