Market Analysis

Unusual Options Activity - Market Recap 5/3

$SPY Flow Report

$SPY Flow Report via TitanFlow

Unusual Options Activity

Bullish Unusual Options Activity picked up significantly this morning but went flat as $SPY consolidated for the rest of the trading session. This should come as no surprise as the majority of traders will await the outcome of tomorrow's FOMC meeting.

It is worth noting a massive $3.69m put buyer stepped in just half an hour before close on the 6/17/22 $397 puts. Overall, there were several unusually large orders, both calls and puts, with 4 - 8 weeks until expiration. This could be a potential play at catching an IV spike on the contracts during tomorrow's initial FOMC reaction.

Darkpool Activity

Significant size was transacted on the Darkpool market during the last hour of market hours, though the sentiment remains unclear. In total, over 5 million shares were transacted on the Darkpool market heading into close.

Hottest Contract

The 5/4 and 5/6 $413 and $417 puts received the most interest in the options flow market today.

Call vs. Put Activity

Unusual Options Flow put volume outweighed call volume 25k > 17k. Overall, options flow volume in $SPY was down over 60% compared to yesterday. While sentiment still seems to be leaning to the downside, anticipate a relatively quiet market until the FOMC's statements tomorrow afternoon.

$SPY Hourly Chart via TradingView

Technical Analysis

$SPY spent the entire trading session consolidating between the 20 day SMA and 50 day SMA, again no surprise considering the relatively low volume as institutional traders/investors tend to avoid allocating significant capital in the short term until after the FOMC meeting. The bulls need to reclaim the 50 day SMA at $419 if they have any shot at breaking the downtrend. Bears need to a 60 minute candle close below the 20 day SMA to confirm a legitimate push to lower lows.

$QQQ Flow Report

$QQQ Flow Report via TitanFlow

Unusual Options Activity

Bullish Unusual Options Activity picked up EOD but fell off as the indices consolidated for the majority of the trading session.

We detected a very unusual bullish position being built in $QQQ 12/16/22 $355 Calls just 15 minutes before close. We can only speculate, but it is likely someone was offloading their position before tomorrow's FOMC meeting. Of course, it could be that there is an institution with unusually bullish confidence in the long term.

Hottest Contract

Outside of the 12/16/22 $355 calls, the 5/4 and 5/6 $320 calls received significant interest.

Call vs. Put Activity

Over $3m of the $10.49m in $QQQ call premium was a result of the 12/16/22 $355 call position.

$QQQ Hourly Chart via TradingView

Technical Analysis

See $SPY Analysis

$IWM Flow Report

$IWM Flow Report via TitanFlow

Unusual Options Activity

Despite showing sleight relative strength compared to $SPY and $QQQ, $IWM continued to see significantly more bearish unusual options activity than bullish. $IWM also continues to receive significant end of day unusual options activity.

Similar to $QQQ, the majority of large unusual options activity detected in $IWM were in medium/longer term contracts. Traders should wait to see institutions step in with well above average size following the FOMC meeting before making any significant trading decisions tomorrow, especially on the short term.

Hottest Contract

The 6/17/22 $179 puts ended the session with volume nearly 17x open interest. It is difficult to gauge the intention of this contract with the uncertainty of tomorrow's FOMC meeting impact, but we can speculate an institution is taking a swing at downside volatility tomorrow. This would make sense when considering $IWM has received significant end of day unusual options activity nearly every day for the past 2 weeks, resulting in massive gains for the institutions taking these last minute positions.

Call vs. Put Activity

Put activity continues to dominate call activity. It is worth noting that the majority of call orders on the session were rather insignificant, smaller orders. Put orders, meanwhile, showcased several more large, confident trades.

Technical Analysis

See $SPY

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