Options traders are dropping the downside hedges they previously paid for. Call contracts secured heavy market share this week. And the put/call ratio on open interest plummeted to 0.52. In late June, investors tracked that metric near 0.76. Defensive positioning vanished.
The Federal Open Market Committee will announce its rate decision at 2:00 p.m. ET on July 29, 2026. Fed Chair Kevin Warsh hosts a press conference shortly after. Markets expect the central bank to hold the target rate steady at 3.5% to 3.75%—a move that pushed investors away from insurance entirely. Ether pushes higher as Bitcoin holds $65,500 amid Big Tech earnings and upcoming policy updates.
Derivative desks executed massive block trades. To hit a specific late-July window, institutional funds built a $2.5 billion notional bull call spread targeting $72,000 on major exchanges. The strategy involves buying 20,000 call options struck at $70,000. Desks then simultaneously sold 20,000 calls at the $72,000 strike. Both legs of the setup expire on July 31.
Honestly, the cost of downside protection collapsed across the board. One-week 25-delta skews plunged to 4%. Buyers pay that premium for puts over calls. Institutional players simply stopped buying short-term insurance. But longer-term contracts look different. With three-month skews elevated between 11% and 12%, the data shifts completely. They’re still buying protection for the fourth quarter. A controlled July rally is what these desks are positioning for.
Debit Spreads Cap Institutional Profit at the $72,000 Resistance Level
The structure of the block trades reveals a calculated strategy. Institutions aren’t betting on an unlimited price breakout. Selling the $72,000 calls permanently caps the maximum return, and a debit spread limits financial risk. It’s also restricting upside beyond the upper strike price. Rather than an unconstrained surge, funds expect a moderate bump following the Warsh press conference. The July 31 expiration captures the volatility window.