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The Nasdaq-100 has climbed 15% since its July low and now stands 2% above its previous record from June. The S&P 500 has also returned to an all time high after spending two months battling surging interest rates.

That resilience might ordinarily inspire celebration, yet the options market delivered a more skeptical message Tuesday. The two largest trades on the tape were substantial positions that raised questions about confidence beneath the market’s record setting surface.

The first appeared in the State Street SPDR S&P 500 ETF Trust, known as SPY. Roughly one hour after the opening bell, someone traded a 100,000 lot put spread that cost a net $44 million.

The transaction likely included the purchase of $61 million in 655 strike puts expiring in March. It also likely involved the sale of $17 million in 500 strike puts with the same expiration.

The position is a bearish bet that would be most profitable if SPY fell to $500. Reaching that level would require a 35% decline from where the fund was trading at the time.

The trade starts making money if the S&P 500 falls more than 18%. Its size made it stand out sharply even on a session marked by unusually active options trading.

“If you’re trying to hedge, these March options are the cheapest they’ve been in 90 days,” said Brent Kochuba of options analytics firm SpotGamma. “The vol is fairly low.”

Cboe’s VIX Index slipped below 15 at one point Tuesday, indicating that options generally became cheaper. Meanwhile, options volume in SPY was more than 20% above its average over the previous 30 days.

The bearish put spread was about four times larger than the next biggest transaction in SPY, according to SpotGamma data. That second trade was a net $11 million call spread.

At the same time, an even larger transaction emerged in Meta options. The activity arrived despite a 20% rally in the social media company’s shares during the previous month as downloads of its personal assistant Muse soared.

The Meta trade involved options expiring in January 2029, the contract with the longest duration available in Meta options. Someone likely bought back $89 million of 560 strike calls that had previously been sold.

At the same time, the trader opened a new position by selling $69 million of 700 strike calls with the same January 2029 expiration. The scale and structure of the transaction made its purpose difficult to read.

Selling calls against a long position is a standard practice for many investors. However, using strikes that are in the money with more than two years remaining until expiration looked notably different from that routine strategy.

“The Meta trade might be some vol guy doing some kind of arbitrage,” said Kochuba, admitting the trade was a bit of a head-scratcher. His assessment reflected the uncertainty surrounding what the unusually structured position was intended to accomplish.

The enormous SPY trade also ran largely against the broader tone of options activity across the fund. Barchart’s sentiment indicator, which measures the net direction of premium in options trades, showed that the overall positioning was not as bearish as the giant put spread.

“That could be due to bullish retail traders,” John Rowland, Barchart’s senior market strategist, said via email. That possibility would help explain why the broad flow in SPY differed from its largest individual trade.

Meta presented a different picture. Barchart’s data showed that net sentiment in the company’s options was negative, bringing the broader flow more closely in line with the caution suggested by the large January 2029 transaction.

The contrast was unmistakable: major stock indexes were reaching records while two exceptionally large options trades carried a distinctly skeptical tone. Beneath the headline highs, some traders were committing substantial sums to positions shaped by caution rather than celebration.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.