SPY, QQQ: Key Trading Levels Factored In By Options Market Ahead Of Budget Bill Vote

The debt ceiling bill, agreed to by President Joe Biden and House Speaker Kevin McCarthy, surpassed an important hurdle on Tuesday evening as the powerful House Rules Committee reportedly voted seven to six to advance the bill to the floor. The bill will hit the floor Wednesday for debate and a final passage vote before it goes to the Senate.

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U.S. markets ended mixed on Tuesday as opposing voices kept investors worried about the ultimate outcome when the bill goes to vote on Wednesday. Under these circumstances, here's a look at the options market outlook for the following exchange-traded funds:

1. SPDR S&P 500 ETF Trust SPY: The ETF closed 0.038% higher on Tuesday at $420.18. Options expiring on Friday show significant open interest accumulation at the $423 and $428 Call strikes, indicating traders are factoring in these levels to act as lines of resistance in case of a rally. On the downside, the $410 level may provide some support in the short term.

2. Invesco QQQ Trust Series 1 QQQ: Shares of the ETF closed 0.45% higher on Tuesday at $349.98. Options expiring on Friday show significant open interest accumulation at the $361 Call strike, indicating traders are pricing in this level as a stiff resistance in the short term. On the downside, decent open interest accumulation can be seen at $335 and $340 Put strikes, indicating the levels may act as supports.

Open interest numbers only provide a fair idea about support and resistance. Any major newsbreak or macro event may lead to significant movement in asset prices and a subsequent shift in open interest levels.

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