What Open Interest Says about Next Week

I’m back and here is your SPY open interest for next week. If you want the real goods you should subscribe below.

SPY-W: (41 of 51 pins since Wednesday expiration inception).* The current best pin is clearly 247. There is also more puts at that strike than calls making it pretty good support coupled with the 246 puts right below. Thus, any move lower from where SPY closed on Friday (247.84) is likely not going to get very far. There isn’t much call resistance above so if SPY is able to stay above 247 then perhaps those calls will close out and give SPY free air to the upside. In the end, it is currently suggesting a rangebound consolidation for the first part of next week. 

SPY-F: (32 of 45 pins since I began tracking Friday’s). This one is a bit more complicated with 2 strikes (245 and 247) that both have high calls and puts. When this happens there is a good chance the open interest shifts before expiration, but for now I would assume that if price were to pin at one of them it would be 247 not 245 (or perhaps would fall in between them at expiration). However, in the event price is able to get and hold below 247 then it would become increasingly possible for 245 to become a magnet. For now I would assume price would not go lower than 245 given all the put support, but above 247 there is minuscule call resistance. Perhaps this also suggests a very rangebound week. 

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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 8/30: Successful pin.

Friday 9/1: Failed pin to the upside.

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