Last week here there was definitely a bias for both some upside (given the high 262 puts) as well as a bit of a rangebound market because of Friday’s expiration. In the end the Monday open interest failed to keep prices up, but the down move did provide a great buying opportunity for Wednesday’s pin. Friday morning SPY was set to pin, but once it got under the 263 puts and couldn’t quickly recover, it was downhill from there. High puts can attempt to hold things up, but once price stays below them (especially at the end of the week) it is very hard to recover back above them.

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  • 10 wins (I only count wins when they are either big wins or where there was enough time to take profits).
  • 2 that didn’t trigger
  • 3 scratch trades
  • 1 loss

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Open Interest: If you want more information on how to read the high calls and puts in the open interest see here.

SPY-M: (4 of 6 for pins). At the moment there is a pretty large range with 255 as put support and both 263 and 265 as call resistance. Under 255 (which isn’t shown because of the large range) there isn’t much put support so if we open under 255 (or get below there) and can’t quickly recover, there isn’t much to support price except for technical levels. The current best pin is around 260. 

SPY-W: (61 of 82 pins). There isn’t much to see here except the high calls at 269 which means lots of room to either stay range bound or go lower. SPY-F: (47 of  75 pins). Friday’s expiration has put support at 250, 255, and a little bit at 260 which price barely closed over. Not shown, but the next large put support under 250 isn’t until 240. To the upside there isn’t any call resistance till 270 and then again at 275. The best pin would be anywhere between 260 and 270, but this will likely change as the week progresses especially if the market stays as volatile as it recently has been. As a reminder (or if you are new to this blog), price will often bounce off put support (or call resistance) on a first touch, but if price gets there a second time it often fails to hold. If price fails to hold at a put support level and it’s at the end of the week there is always the potential for delta hedging

Pinning Stuff:

*An explanation as to how I define range pinning can be found here. More information about what pinning is can be found under the education section or here.

Monday 4/2: Fail with puts winning out.

Wednesday 4/4: Successful pin.

Friday 4/6: Failed pin to the downside.

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