US CFTC data shows S&P 500 NC net positions moved from -80.9K to -42.5K.
The net position stayed negative, but it became less negative over the latest reporting period.
Speculators Reduce Bearish Exposure
We are seeing large speculators significantly reduce their bearish bets on the S&P 500. Their net short positions have been nearly cut in half, moving from -80.9K to -42.5K contracts. This signals a major decrease in negative sentiment among some of the market’s most influential players.
This shift comes as the S&P 500 has found support around the 5,750 level after a volatile first quarter. We’ve also seen the CBOE Volatility Index (VIX) pull back to around 16, down from its March highs, suggesting fear is subsiding. Traders may be growing more comfortable that the market has priced in the latest economic data.
This sentiment is a notable change from the deep pessimism we observed during the brief market correction in the fall of 2025. With the latest March CPI report coming in at a manageable 2.8%, fears of a surprise rate hike from the Federal Reserve have eased considerably. This backdrop may provide a tailwind for equities in the coming weeks.
Implications For Options Positioning
For derivative traders, this reduction in short positioning suggests that buying puts for downside protection may be less urgent. It could be a time to consider strategies that benefit from a stable or modestly rising market, like selling out-of-the-money puts. However, the position is still net short, so we should not interpret this as a signal of an aggressive bull run just yet.
