Stock market bulls notched a decisive victory this week as the S&P 500 reached all-time highs and options activity surged to levels that left even veteran traders comparing the frenzy to the exchange floor’s busiest days from decades past.
The benchmark index added 0.6% on Friday, capping a 3.6% weekly advance that saw it cross above 7,700 for the first time in history. Meanwhile, the Cboe Volatility Index fell to its lowest level since January, signaling increased confidence among market participants.
Record-Breaking Options Activity
According to CNBC, more than four million S&P 500 index calls changed hands on Cboe Global Markets on Tuesday, exceeding the previous record set in May by 10%. A trader on the Cboe floor in Chicago remarked that the noise level during Tuesday’s rally evoked memories of when thousands of traders packed the pits years ago.
Zero-day-to-expiry call options accounted for 2.4 million trades in the S&P 500 on Tuesday, also setting a new record. The ratio of puts to calls across all options plunged to 0.83, the second-lowest on record. That figure typically sits above 1, reflecting the common use of put options as hedging tools rather than directional bets.
Total open interest in S&P 500 options ended the week at 27.4 million contracts, placing it in the 93rd percentile over the past year. The ratio of call open interest sits even higher, in the 95th percentile.
Key Levels to Watch
The concentration of open interest can offer clues about where the market might find support or resistance ahead. In the State Street SPDR S&P 500 ETF Trust, the most popular strike by combined open interest is 760, roughly 1.7% below Friday’s close. Some 94,000 open puts at that level could provide support if the market dips, potentially triggering profit-taking from bearish traders who endured a difficult week.
On the upside, the 785-strike holds the largest concentration of call buyers, with 114,000 open contracts.
Broader Market Drivers
Ed Rumell, head of ETFs at Corgi, suggested seasonal factors may be at play. “‘Sell in May and go and play’ is over and advisors are getting back to work as the summer ends,” he said, noting heavy activity in buffer fund options as well as technology trades.
Semiconductor stocks, which had faced pressure earlier in the year, rallied sharply. The iShares Semiconductor ETF advanced more than 7% for the week, while the Corgi Lithography & Semiconductor Photonics ETF jumped 13%.
The advance also received support from the bond market, where the 10-year Treasury yield paused its climb at 4.7%.
Corporate earnings have provided a solid fundamental backdrop for the rally. S&P 500 earnings are on track to grow 47% in the second quarter, which would mark the strongest expansion since the rebound from the pandemic in 2021, according to FactSet.
The confluence of record options volumes, fresh index highs, and robust earnings growth suggests market participants are positioning aggressively for further gains, even as they navigate elevated valuations and interest rate uncertainty.
Source: www.cnbc.com — https://www.cnbc.com/2026/08/08/record-breaking-week-for-options-powers-sp-500-surge.html
This article is for informational purposes only and does not constitute financial, investment, tax, or legal advice. Do your own research and consult a licensed professional before making financial decisions.
