SPX Faces Off With Key Trendline

Additionally, short-term traders are becoming increasingly optimistic, evident by the 10-day moving average of our customer-only, equity-only buy (to open) put/call volume ratio, as seen in the chart below. As the market troughed in March, thesemarket participants were at a pessimistic extreme not seen in years. Now, just two months later, this group is showing levels of optimism seen at short-term tops in 2019.

For short-term options traders, this would imply having put exposure in your portfolio, even if this means by way of pair trades or straddles -- especially now that options have become cheaper, as broader market volatility expectations have declinedand individual equity implied volatility has decreased -- as we move out of earnings season.

Todd Salamone is Schaeffer's Senior V.P. of Research

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