Last week here, I showed the three SPY open interest ranges for expiration and price pretty much held very nicely within them. I guess that isn’t so hard when the market trades in a very small range. Yet if you knew where there was put support and call resistance it could have prevented you from shorting in the hole or looking for a breakout that didn’t have great potential.

If you have not yet subscribed to my weekly freebie you can do so below to get next weeks free trade IDEA (not alert – if you want an alert you need to be a subscriber) sent to your mailbox Monday morning. Last week was BABA, which almost triggered Friday afternoon. It got over 201 but didn’t hold, which was a requirement of the trigger. In SassyOptions we got next weeks calls knowing that there was a good chance market makers would take it back down below the high 200 calls before the close. 

The stats for the weekly freebie since I began sending them are as follows:

  • 12 wins (I only count wins when they are either big wins or where there was enough time to take profits).
  • 4 that didn’t trigger
  • 4 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: (8 of 13 for pins since Monday expiration inception).* The current best pin for Monday is between 272 and 273, but there really isn’t a whole lot of put support or call resistance except for the puts at 268. Thus, if price does get under 272 or over 274 then it could keep going in that direction if internals are suggesting follow through. In other words, if intraday-day breadth internals (up/down volume, advance decline/line, ticks etc.) aren’t suggesting a trend day then price is likely to stay within that small range.

SPY-W: (66 of 89 pins since Wednesday expiration inception).* Wednesday’s expiration also has some put support at 268 and call resistance at both 274 and 275. Price would need to convincingly get over 275 (also because of Friday’s expiration which you will see below) for us to even acknowledge the 280 high calls. 

SPY-F: (52 of  82 pins since I began tracking Friday’s).* The main take away for Friday’s open interest is price will face very tough resistance at 275 if it even gets there. It doesn’t mean price can’t get over that level, but if price isn’t very strong then it would likely fall back below 275 by the end of the week unless those calls closed out. 

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 5/21: Successful pin (I realize it closed a tiny bit outside of one of the high call strikes, but it pretty much stayed within the confines of the range all day till the very end.

Wednesday 5/23: Successful pin.

Friday 5/25: Successful pin.

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