May 15th, 2026 Option Outlook

May opex is here

Good Morning! Another strong .8% advance for SPX.

In the pre-market SPX is seeing a selloff, but the real news is the 30Y treasury reaching 5%. This is a counterpoint to the equity markets pricing in a swift resolution to Hormuz, inflation, and oil supply normalcy. Have the options markets believed in a swift resolution as well?

For today, we are looking at very strong negative vanna, which will reveal its true intentions at 7400. If we test 7400 and fail, the next stop really quickly will be 7340-7350 area where dealers will be neutral vanna. That might be the desired target today. The less likely desired target would be 7550 as customers bought those calls. I think we would need a catalyst to get that kind of boost, but it bears mentioning because over the next few weeks there is slight positive vanna.

The June opex is still extremely strong negative vanna, and that will take hold eventually. This could be the start of that, but if so, I would predict a rocky, slow decline rather than a rapid limit-down decline unless economics related to geopolitics leaves the equity market no choice but to respect the current environment.