Friday’s SPX Options Chain Already Priced in Today’s Drop

3 wrzToday’s sharp 2.2% SPX decline wasn’t a surprise for those who looked closely at the options metrics after Friday’s spot price fakeout. Ahead of the long weekend, market participants priced in the downside with both short- and long-term options.

BEFORE TODAY OPEN



Put options were nearly twice as expensive as calls at equivalent Expected Move distances before Tuesday's open!

BEFORE TODAY CLOSE

While today’s drop has led to some call skew on weekly options, suggesting a short-term rebound, the long-term bearish sentiment remains intact.



Key unemployment data this week will be crucial for the market’s next move.

If you'd like to see the option chain metrics in your charts, be sure to check out our free demo script here:

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Komentarz

What we see on our tradingview charts today with Options Overlay?

The anticipated minor bullish pullback happened today, but the bullish momentum faded by the end of the day. IV is rising as fear grows ahead of the data release.

All PUT pricing skews are back in the red on our board, with both short- and long-term puts overpriced, reflecting market fear and pessimism ahead of Friday’s unemployment data.

We might test or even fill the gap extending down to 5475 tomorrow.

If the price holds, we could see a strong bounce back toward the 3/8-4/8 region up to 5600.

If not, the next level down is around 5310, near 0/8.