S&P 500: As Fed Decision Looms, Here's A Look At Crucial Trading Levels Priced In By Options Market

Despite the crucial debt-ceiling voting this week, the S&P 500 has managed to stay in the green so far. The Senate on Thursday night cleared the debt ceiling bill with 63 votes in favor of the legislation and 36 votes against it. The index is currently trading near highs seen in August 2022.

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The market had been optimistic about the debt ceiling getting passed through the House and Senate and although many investors expected lawmakers to take the issue to the wire, a majority did not expect them to lead the crisis to a default.

The next big thing that investors will be watching out for is the Federal Open Market Committee meeting on June 13-14 where the Federal Reserve will reveal its June policy decision and likely provide vital clues for future rate path. Under these circumstances, here's a look at the options market outlook for the S&P 500 index to better understand crucial trading levels:

1. Resistance: The S&P 500 ended 0.99% higher at 4,221.02 on Thursday. Options expiring on June 16 show maximum open interest amongst out-of-the-money Call options at the 4,300 Call strike, indicating the level may act as a stiff resistance in the short term.

2. Support: On the downside, there is significant open interest accumulation at the $4,150 Put strike, indicating the level could provide decent support in case of a sell-off in the short term.

Open interest levels only provide a fair idea about support and resistance. Any major newsbreak or macro events could lead to a significant change in stock prices and cause a subsequent shift in open interest levels.

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