This Week in Options Anomalies — Week of May 12, 2026
A weekly series. Every Monday I run the options flow scanner across my watchlist and publish the three most notable readings — with context, interpretation, and what (if anything) I did about it.
Raw data from the Options Flow Analyzer skill running on Claude Code. Lottery call filter applied to all readings.
Signal #1: XLI P/C 5.32 — Industrial Sector Hedge Storm
Raw reading: 5.32
Lottery-adjusted: 5.28
Classification: [OUTLIER — INSTITUTIONAL HEDGE SIGNAL]
Normal range for XLI: 0.6–1.4
This was the week's standout number. XLI put/call at 5.32 means put volume was running more than five times call volume on the industrial sector ETF. The lottery adjustment barely moved it (5.32 → 5.28), which is significant: the puts are real institutional contracts, not retail noise.
For context, XLI tracks industrials — Caterpillar, Honeywell, RTX, GE Aerospace. These are economically sensitive names. When you see this level of put buying concentrated in a sector ETF, it's almost always one of two things: a macro hedge against cyclical slowdown, or a specific catalyst someone is positioning ahead of.
What happened after: XLI fell 2.3% over the following four sessions. Not a dramatic move, but the direction was right.
What I did: Flagged for monitoring. Set a trigger — if XLI P/C holds above 3.0 for three consecutive sessions, reduce sizing on any industrial-adjacent exposure. Did not open a new position on a single reading.
Takeaway: Sector ETF put flow is a leading indicator worth watching. The lottery-adjusted reading staying at 5.28 was the confirming detail — genuine institutional positioning, not retail lottery buying.
Signal #2: CEG Lottery Call Distortion — 98.2% Noise
Raw P/C: 1.06
Lottery-adjusted P/C: 59.2
Classification (raw): [NEUTRAL]
Classification (adjusted): [EXTREME BEARISH]
This one almost slipped past me. Raw P/C of 1.06 is exactly the kind of reading you skip — neutral, unremarkable, nothing actionable.
After running the lottery filter:
CEG Options — Week of May 12, 2026
Raw call volume: 47,832
Lottery calls removed: 46,976 (98.2%)
Real call volume: 856
Raw P/C: 1.06 [NEUTRAL]
Adj P/C: 59.2 [EXTREME BEARISH]
98.2% of all call volume was OTM lottery contracts — delta below 0.15, strikes more than 20% above price, expiring within the week. Strip them out and the real picture is extreme put dominance.
What happened after: CEG was flat to slightly down on the week. The adjusted reading suggested bearish pressure that didn't fully materialize in price — but the signal was directionally correct.
What I did: Nothing. CEG is not a name I currently hold or watch closely. I noted it as a confirmation that the lottery filter matters — this is exactly the kind of name where raw P/C is actively misleading.
Takeaway: On retail-active names, raw P/C ratios can invert the actual signal. Always run the filter before acting.
Signal #3: SPY P/C 0.44 — Extreme Bullish Positioning
Raw reading: 0.44
Lottery-adjusted: 0.51
Classification: [EXTREME BULLISH]
Historical context: Bottom 8th percentile of SPY P/C readings
SPY at 0.44 is notable. The broad market index is seeing heavy call buying relative to puts — a level that historically sits near the bottom decile of readings going back several years.
Two ways to read this:
Bullish interpretation: Smart money is positioning for continued upside. Institutional call buying on SPY often precedes momentum moves.
Contrarian interpretation: Extreme bullishness is complacency. When everyone is positioned long, there's no one left to buy. The most crowded trades unwind the fastest.
The lottery adjustment shifted it from 0.44 to 0.51 — a modest move, meaning some of the call buying is retail speculation but the core reading is genuine.
What happened after: The week ended slightly positive for SPY. The bullish read was directionally correct, though 0.44 is the kind of reading that historically precedes both strong rallies and sharp corrections — it narrows the range of outcomes but doesn't determine direction alone.
What I did: No change to existing SPY exposure. Used the reading to bias my interpretation of individual names toward the bullish side, all else equal.
Takeaway: Extreme SPY P/C readings are context, not signal. They shift the prior but don't make the trade.
This Week's Full Scan
Options Flow Summary — Week of May 12, 2026
(Lottery-adjusted readings in parentheses)
SPY 0.44 (0.51) [EXTREME BULLISH]
QQQ 0.54 (0.58) [BULLISH]
TEM 0.50 (0.47) [NEUTRAL]
RXRX 0.38 (2.14) [raw: EXTREME BULLISH / adj: BEARISH — high distortion]
IREN 0.83 (0.91) [NEUTRAL]
XLI 5.32 (5.28) [OUTLIER — INSTITUTIONAL HEDGE]
CEG 1.06 (59.2) [raw: NEUTRAL / adj: EXTREME BEARISH — 98.2% lottery]
The two names with the largest raw-to-adjusted divergence (RXRX and CEG) are both retail-heavy, options-active stocks. This pattern holds consistently — the noisier the retail participation, the more the lottery filter matters.
Next Week
Same format, new data. The scanner runs every morning; I'll publish the three most notable readings the following Monday.
If you want the scanner running on your own watchlist, it's open source: github.com/tellmefrankie/ai-investment-skills
Full setup with Telegram alerts and automated scheduling: jaehyunpark.gumroad.com/l/tcyahy
Not financial advice. This is a personal data log, not investment recommendations. Options trading involves substantial risk of loss.
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