06.26.22 | Does SPX June Quarterly Options Activity Agree with CNBC?

Will Rebalancing Push Equities Higher?

“JPMorgan’s Marko Kolanovic sees a case in which stocks could surge 7% in the week ahead, based on rebalancing alone.” (CNBC)

CNBC added, “With the S&P 500 down more than 13.7% for the second quarter and 17.9% for the year so far, investment managers will have to boost stock holdings to regain asset allocation levels.”

Friday’s Options Activity Differs

Investors sell ITM calls when they anticipate near-term downside moves.   On Friday … focusing on large lot positions, ITM calls SOLD exceeded OTM calls BOT (speculative) by a factor of 15:1.

For single transactions >$1M, again … ITM calls sold far exceed those bought.