Don here...
Someone bought 54,000 SPY put contracts in two trades today while the S&P 500 rallied 1%. Brandon Chapman caught it all in real time using Block Hunter.
The trades hit at the 660 strike with a 22 delta. One block landed at 22,000 contracts. The other came in at 32,000. Both executed at the exact same price, split across two exchanges.
That kind of size creates downside gamma pressure. When the market maker sells those puts, they have to hedge. The more the S&P 500 drifts toward that strike, the more selling pressure builds on itself.
Brandon pointed out that retail traders have stepped back from buying the dip. The Iran situation in the Persian Gulf has cooled that enthusiasm. Institutional selling and insider selling are meeting less resistance on the other side.
Oil is also in steep backwardation right now. Brandon noted that elevated crude prices will eventually squeeze profitability and could put the Fed on pause.
But SPY was just one of five massive block trades Brandon broke down tonight. He walked through each one, explained the flow, and structured a specific trade around every signal.
Here is what the block flow revealed:
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SOFI: 31,000 put spread contracts hit in a single trade. Buyers grabbed the April 16 strike and sold the 13. SoFi is sitting on its 61.8% retracement, and lending across the board is in trouble. Brandon structured a 17/15 put vertical for $0.58.
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KHC: 13,000 call contracts bought at support. This is a defensive name where money rotates when tech sells off. Brandon built a 22.50/25 call vertical for $0.77 with a target of $24 for roughly 70% gain.
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FXI: 10,000 put contracts bought in one trade on the China ETF. July expiration, $35 strike. Currently trading at $37. Brandon structured a 37/35 put vertical for $0.70 with a breakeven at $36.30.
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MARA: 6,000 contracts in a risk reversal, selling puts and buying calls for a six cent credit. The stock has 24.9% short interest and a 2.35 day short ratio. Brandon laid out how a gamma squeeze could trigger a full short squeeze, and structured a 10/12 call vertical for $0.45.
The block flow is painting a clear picture. Bearish on SOFI, bearish on FXI, hedging the S&P 500 downside, and betting on a squeeze in MARA.
Click here to watch Brandon break down every block trade and the exact setups he structured around them
To your success,
Don Kaufman
Chief Market Strategist, TheoTRADE
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