SPY, QQQ: As Earnings Season Gathers Pace, Here's What Options Market Indicates About These ETFs

U.S. markets closed flat on Tuesday following a mixed set of earnings announcements. The SPDR S&P 500 ETF Trust SPY closed 0.07% higher at 414.21 while the Invesco QQQ Trust Series 1 QQQ ended almost flat at 318.86. After a slew of results from major players including Goldman Sachs Group Inc GS, Johnson & Johnson JNJ, and Bank of America Corp BAC, market participants are now waiting for earnings announcements from Tesla Inc TSLA and Procter & Gamble Co PG this week.

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Meanwhile, here's a look at how professional traders are positioning themselves in the options market for these popular exchange-traded funds:

1. SPY: Options expiring on Friday show significant open interest accumulation at the 415 Call strike at the time of writing. This indicates the level may act as a resistance in the short term. On the downside, significant open interest accumulation can be seen at the 410 Put strike, indicating the level can be expected to provide stiff support for the week.

2. QQQ: Options data show that the 320 Call strike continues to have significant open interest accumulation indicating traders are expecting this level to provide stiff resistance in the short term. On the downside, the maximum open interest accumulation amongst out-of-the-money Put strikes can be seen at the 315 level, indicating strong support is being factored in at this level.

It is noteworthy that open interest data only provides a fair idea about support and resistance levels. Any major news break or a macro event could lead to significant movement in asset prices and subsequent shifts in open interest levels.

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