What This Rare Options Signal Could Mean For the SPY

For just the fifth time since 2005, SPY call volume exceeded put volume for three straight sessions

Jul 13, 2016 at 1:47 PM
facebook X logo linkedin


Yesterday, SPDR S&P 500 ETF Trust (SPY) call volume exceeded SPY put volume for a third consecutive session. While this options data may not seem particularly notable, it's a historical rarity. In fact, yesterday's signal represented just the fifth time this has happened since 2005.

Looking more closely, those signals haven't been evenly spaced apart over the last decade. When SPY call volume topped put volume for a third straight session on Tuesday, it was the first time this had occurred in over seven years -- since March 2009, during the financial crisis. Schaeffer's Quantitative Analyst Chris Prybal breaks down the five episodes in the table below, along with the SPY's percentage returns within certain time frames:

spy option signal july 13

We've established the relative rarity of the SPY signal, but what happens next? The sample size is small, so it's hard to draw a definitive conclusion. But, based on the data available, the returns are encouraging for bulls. Going out just two weeks, the SPY already averages a gain of 3%, versus an at-any-time return of 0.3%. By six months and one year, the typical post-signal advances are an even more impressive 10.6% and 23.4% -- outstripping their corresponding anytime readings of 3.2% and 6.7%, respectively.

Not surprisingly, volatility is also higher pretty much across the board, based on standard deviation. In other words, the SPY has experienced sharper-than-usual moves -- to both the upside and downside -- after flashing this unusual options signal.

Let us help you profit from market volatility. Target big gains in short order with a 30-day trial of Schaeffer's Weekly Volatility Trader!

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI