Jun. 23rd, 2025 Option Outlook

Escalation

Good Morning! As war intensifies in the Middle East, SPX closed down -.2%

Over the weekend, America made direct attacks against Iran’s nuclear facilities. I had thought the increase in oil prices and the possible closure of the Strait of Hormuz would cause a bit more red in the market, but so far that has yet to manifest. This week is somewhat busy with JPow testifying on the Hill, but this rarely produces anything of substance. Going into the end of the quarter, what is the option outlook?

For this week’s option expiration, 5960 seems to be the tipping point. If we break 5960, we can experience a swift 20-25 point drop to 5935 or so.

The real issue for the next month is actually next week. The JPM strike at 5905, as well as two smaller call strikes at 5950 and 5925 are dominating the outlook. As a result by next week I expect to at least test 5900, and if 5900 fails, I expect to see some overvixing. I would need to see SPX pass 6000 convincingly for that thesis to be nullified.