We love to look at SPX option open interest to get a feel for where the markets might be headed into expiration next month. Historically we have been pretty spot on with our analysis.
What makes this tools so powerful is its ability to show the “pressure points” of the markets. The areas where it would cause the most pain for investors. Sometimes this can shed some very bright lights on your own trading strategy now – so that you have time to make adjustments.
For SPX August expiration options, it looks like the area with the most open interest is centered around 1,050. From where the SPX is trading currently, this brings us back down near the lows of late June – be careful out there bulls.
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