Let's see the Open Interest chart from our OptionM8 app. Below is SPY 0908 OI.
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| OI SPY 0908 from OptionM8 App |
As you can see, there are three big short call positions, 244, 245, and 247, respectively. Let's see each of daily chart.
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| SPY and SPY 0908 244C, Daily |
Most of those 244 Calls were sold on August 8th ($5.7 x 10000) and August 9th ($4.5 level x 7000). Currently 244C is $4, so those sellers are still in profit. For the record, sellers' VWAP is $5.14 as of September 1st.
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| SPY and SPY 0908 245C, Daily |
SPY 245C had several selling between August 3rd and August 9th. Current VWAP for sellers is $3.95.
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| SPY and SPY 0908 247C, Daily |
SPY 247C had also bulk selling in early August. Current VWAP for sellers is $2.29.
I would say those call sellers thought the market topped in early August. Well, they may be right, or not. The point is their positions are now in the money, and the premium they pocketed is eaten up by recent spike of SPY.
If (BIG IF), the market can bring up SPY $1 more, those sellers would start to hedge there positions. The problem is there are not so many SPY longs floating around. If it happens, we would see very sharp short squeeze.
