How Options Positioning Shapes Support and Resistance in Stocks and Futures

The concepts below are drawn from an educational presentation on options market positioning by Matthew Fox of SpotGamma, delivered as part of a NinjaTrader Ecosystem-hosted webinar.

Matt’s central point is that the options market is frequently driving the stock market, the futures market, and index pricing more than traders realize. Since 2017, options trading volume has grown more than 150%, while stock trading volume has grown by less than a quarter of that amount. In his view, that shift means a trader without visibility into options positioning is, in some sense, trading in the dark. He walked through five real examples from an eight-week stretch this spring to show how this plays out.

 

Why Options Positioning Creates Real Support and Resistance

 

Matt’s framing is that the market isn’t random, it’s positioned. When traders look at a stock like Tesla fundamentally, they look at deliveries and sales. When they look at it technically, they look at past price and volume. Both, in his description, are ways of projecting the past forward. Options positioning is different: it shows, in real time, where buyers and sellers are actually positioned, which in turn creates support and resistance levels in the underlying stock, index, or futures contract. He says the same dynamic holds for ETFs, index funds, and futures across the major indices, including the S&P, Nasdaq, and Russell.

A recurring concept in his examples is the “put wall,” a concentration of options positioning that tends to act as a floor under the market. Because large options positions often require dealers and market makers to hedge them, that hedging activity can turn into real buying pressure at a given level, and a similar dynamic on the call side can create resistance overhead.

 

Tracking a Geopolitical Event: The Iran Conflict

 

Matt’s first example covered the period from March 23rd through mid-April, during the escalation around the Iran conflict. As that news developed, SpotGamma’s daily analysis showed a put wall in place at a given level, acting as support. When that support level shifted lower on March 27th, the S&P moved down with it over the following several days. Later, as news broke about a possible resolution around the Strait of Hormuz, the resistance level (where a large concentration of call selling sat) moved higher, coinciding with a ceasefire announcement that pushed the market up further.

His point wasn’t that the news itself was predictable. It’s that the options market gave a running signal, day by day, of how far a given move was likely to extend, based on where positioning actually sat, not guesswork.

 

How the Final Hour of Trading Can Shift Direction

 

The second example zoomed into a single trading day, focusing on the window from 2:30 to 4 p.m. Eastern, when many options traders and market makers close out or rebalance their positions. Matt notes that more than 60% of options on the major indices are now considered zero-days-to-expiration, meaning a large share of options activity opens and closes within the same day. That makes the hour before the close especially sensitive to shifts in options positioning.

He described a day when a negative, more volatile zone developed in the early afternoon as large options positions concentrated at certain levels created resistance overhead. As the market moved lower into the close, new positioning shifted the balance toward a calmer, more positive zone, one associated with lower volatility and steadier moves. The broader lesson is that the type of options positioning in play during that final trading window can point to which way a market is more likely to move into the closing bell, even hours ahead of time.

 

Options Positioning Around Earnings

 

The third example centered on Microsoft’s earnings report on April 29th. Microsoft beat expectations, reporting $4.27 per share against an expected $4.06. Despite the beat, the stock dropped afterward. Matt’s explanation is that, heading into the report, options positioning had Microsoft in what he called an overbought condition, with a resistance level in place from options activity. That level held for several days after the earnings beat before the stock was able to work back above it.

The takeaway he draws from this is that fundamental results (a beat or a miss) don’t always match the immediate price reaction, and that options positioning going into an event can be a useful second lens alongside fundamentals.

 

When There’s No News at All

 

That same day, April 29th, also produced a separate example in the major indices, this time without any real news attached. The S&P opened strong and was up more than 30 points by 11 a.m., with financial media describing it as a quiet session. Then, without any fresh headline, a wave of new same-day options positions opened, and the index reversed sharply, dropping roughly 50 points within minutes.

Matt’s point here is that this kind of move can be tracked before it fully plays out. A running measure of the hedging pressure created by real-time options activity showed downward pressure building even as the index was still climbing, ahead of the reversal itself.

 

Building a Trading Plan Around Key Levels

 

The final example, from around May 11th and 12th, showed how these concepts can come together into an actual trading plan. Heading into that stretch, same-day options positioning on the S&P 500 index was concentrated around a support level near 7390 and a resistance level near 7420. Over the trading session, price bounced off the support level, tested resistance, and repeatedly got pulled back toward that range without breaking out in either direction.

 

What This Framework Can and Can’t Tell You

 

Matt was direct that everything covered is educational, not trading advice, and that anyone considering a trade should speak with a professional or be sure they understand what they’re doing first. Across all five examples, whether the catalyst was a geopolitical conflict, an earnings report, closing-hour dynamics, a no-news reversal, or a pre-planned setup, his broader point is that options positioning gives traders a way to see where support and resistance are likely to form. It’s not a guarantee of where price will go. He also notes that larger, more sophisticated institutions and market makers tend to concentrate their activity at specific times, mainly the market open and the final hour before the close, which is part of why those windows show up so often in his examples.

 

Key Takeaways

• Options market activity, particularly hedging flows tied to large positions, can create real support and resistance levels in stocks, futures, and indices.
• A “put wall,” a concentration of options positioning, can act as a support level, while heavy call positioning creates resistance overhead.
• More than 60% of options on major indices are now zero-days-to-expiration, which makes the final hour before the close especially sensitive to shifts in positioning.
• Options positioning around an earnings report can create a ceiling or floor that doesn’t always match the market’s fundamental reaction to a beat or miss.
• Sharp, no-news reversals can be preceded by rising hedging pressure that shows up in options activity before price actually turns.
• This kind of analysis is presented as educational context for building a trading plan, not a guarantee of where a market will move.

 

Frequently Asked Questions

 

How does the options market affect stock and futures prices?

When a large options position needs to be hedged, that hedging shows up in the underlying market as real buying or selling, not just paper flow. Because those hedging needs cluster around certain strikes and price levels, they end up forming the support and resistance patterns traders can watch for in stocks, futures, and indices.

What is a “put wall” in options trading?

A put wall is a price level where put option positioning is heavily concentrated. It tends to work like a floor: as long as that positioning holds, the hedging tied to it can keep price from falling much further below the level, at least until positioning shifts elsewhere.

Why does the last hour before market close matter so much for options-driven moves?

A large share of options on the major indices now expire the same day they’re traded. As that expiration approaches in the final hour of trading, options traders and market makers are actively closing out or rebalancing positions, which can push the market toward a more volatile or a calmer state depending on how that positioning shifts.

Can options positioning predict how a stock reacts to earnings?

Not with certainty, but it can add useful context. In one example, a stock beat earnings expectations and still dropped, which lined up with options positioning that had already put a resistance level in place before the results came out.

Can a market move sharply with no news at all?

Yes. One example showed a stock index reversing direction by dozens of points within minutes with no fresh headline behind it. The move was preceded by a buildup in options-driven hedging pressure that could be tracked before the reversal happened.

Is this kind of options analysis a guarantee of future price movement?

No. It’s presented as educational information meant to add context to a trading plan, not a guarantee. Traders are encouraged to consult a professional and understand the risks involved before acting on any analysis.

To learn more about this, watch Matthew Fox’s full presentation here.