The Nasdaq-100 has surged 15% since its July low and is now trading 2% above its previous record from June, while the S&P 500 has returned to all-time highs after contending with rising interest rates over the past two months [1]. Despite these bullish milestones, Tuesday saw two significant bearish options trades that suggest skepticism among some market participants. In the State Street SPDR S&P 500 ETF Trust (SPY), a 100,000-lot put spread was executed, costing a net $44 million. This trade involved buying $61 million of 655-strike puts expiring in March and selling $17 million of 500-strike puts for the same expiry, positioning for a potential 35% decline in SPY from current levels [1]. According to Brent Kochuba of SpotGamma, these March options are the cheapest they've been in 90 days, with volatility remaining low. The Cboe's VIX Index briefly dipped below 15, making options generally cheaper, and overall options volume in SPY was more than 20% higher than the 30-day average [1]. The put spread was the largest trade in SPY that day, four times bigger than the next-largest trade, an $11 million call spread, per SpotGamma data [1]. Meanwhile, a substantial options trade occurred in Meta, despite the stock rallying 20% over the past month as downloads of its personal assistant Muse increased. In the January 2029 expiry, someone likely bought back $89 million worth of 560-strike calls and simultaneously sold $69 million of 700-strike calls, a move that Brent Kochuba described as unusual and possibly related to volatility arbitrage [1]. Barchart's sentiment indicator showed that the big SPY trade was contrary to the overall bullish tone in options trading across the fund, possibly due to bullish retail traders, according to John Rowland, Barchart's senior market strategist [1]. In contrast, net sentiment for Meta options was negative [1].
CONCLUSION
Despite record highs in the S&P 500 and Nasdaq-100, large bearish options trades in SPY and Meta signal skepticism among some institutional investors. Elevated options volume and mixed sentiment indicators suggest underlying caution in the market, even as retail traders remain bullish. The market takeaway is that optimism is tempered by significant hedging activity and negative sentiment in key tech names.