Wall Street has been treading carefully this week in the wake of a barrage of developments including the debt ceiling talks and inflation data release. The SPDR S&P 500 ETF Trust SPY closed 0.44% lower on Tuesday while the Invesco QQQ Trust Series 1 QQQ lost 0.63%.
In the latest development on the debt ceiling crisis front, the meeting between President Joe Biden and House Speaker Kevin McCarthy on Tuesday did not yield any decisive results. However, the two leaders have agreed to hold another meeting on Friday. Investors are now waiting for the release of the consumer price inflation data.
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Meanwhile, here's a look at crucial trading levels factored in by the options market for these exchange-traded funds:
1. SPY: Options expiring on Friday indicate significant open interest accumulation at the $416 Call strike, indicating the level could act as a resistance in the short term. On the downside, the $410 mark is witnessing significant open interest numbers indicating market participants do not expect the ETF to breach this level on the downside. This is interesting given the fact that it closed at $410.93 on Tuesday.
2. QQQ: Options data shows significant open interest accumulation at the $325 Call strike, indicating the level is expected to provide a significant resistance in the short term. On the downside, the $317 mark can be expected to provide some cushion.
It is noteworthy that open interest levels only provide a fair idea about support and resistance levels. Any major news break or macro development can lead to significant movement in asset prices and a subsequent shift in open interest levels.
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