Two Large Bearish Options Trades Emerge as U.S. Stocks Hit All-Time Highs
nashnova research
On the same day the S&P 500 reclaimed its record high, two bearish trades totaling over $100 million in notional value hit the options market — a $44 million SPY put spread and a near-$100 million long-dated Meta call restructuring — diverging sharply from prevailing retail bullishness.
What exactly is the $44 million SPY put spread betting on?
A trader spent $44 million net to buy SPY $655-strike put options expiring next March while selling $500-strike puts at the same expiry — a classic put spread.
In plain terms = buy insurance that pays when SPY drops below 655, then sell insurance below 500 to offset the cost — the bet targets a significant decline, not a total crash.
Maximum profit comes if SPY falls to $500, roughly a 35% drop from current levels. The position turns profitable once the index falls more than 18%.
Why place this bet right now?
The VIX briefly dipped below 15 that day. This means → fear was at a trough, and options prices sat at their cheapest level in 90 days.
SpotGamma founder Brent Kochuba put it simply: "If you want to hedge, these March puts are the cheapest they've been in nearly 90 days."
This reflects a counterintuitive logic: the more euphoric the market and the lower the volatility, the cheaper it is to buy downside protection — and this trade exploited exactly that window.
How unusual was this trade relative to the broader market?
It was the single largest trade by volume in the SPY options market that day — roughly four times the size of the second-largest trade, an $11 million call spread.
Total SPY options volume for the day ran more than 20% above its 30-day average, with most of the excess driven by this one position.
Yet the Barchart sentiment indicator showed SPY options overall still leaning bullish. Kochuba noted "this is probably retail going long." This means → this massive bearish position ran directly against the market's prevailing direction.
What happened in Meta's options market?
Despite Meta's stock rising 20% over the past month, a trader restructured a position on January 2029 contracts — the longest expiry available for Meta options. The move likely involved buying back previously sold $560-strike calls (notional value ~$89 million) and simultaneously selling new $700-strike calls at the same expiry (notional value ~$69 million).
In plain terms = the trader had earlier sold a bet that Meta would stay below $560; now they bought that bet back at a loss and replaced it with a new ceiling at $700 — shifting their risk line from 560 up to 700.
Kochuba called the trade "somewhat puzzling," suggesting "it might be a volatility trader running some kind of arbitrage." Selling deep in-the-money calls with over two years to expiry is not a standard covered-call strategy.
What do these two trades, taken together, tell us?
Combined notional value exceeds $100 million, surfacing on a day when the Nasdaq 100 sat 15% above its July low and the S&P 500 printed an all-time high.
Barchart data showed Meta options sentiment also net negative that day, aligning with the SPY divergence. This reflects a growing crack between big-money positioning and retail sentiment.
Whether these are systematic risk hedges or directional bearish bets remains unresolved — but one thing is clear: at the market's most optimistic moment, someone is spending real money to get paid on a downturn.
市场有风险，内容仅供研究参考，不构成投资建议。