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The S&P is closing in on a critical level

New key level for the S&P 500

Short-term traders can't stop talking about 1,950, which is considered a critical level for the . And on Monday, the market is rising to within spitting distance of that widely watched marker.

The level has frequently served as a turning point for the S&P, increasing its importance. It is also roughly the S&P 500's current 50-day moving average.

Read More This is the S&P level traders are talking about now

A 50-day moving average is merely an average of the prior 50 closing prices, but it can serve as a useful milepost to show about where stocks have been recently. In addition, the mere fact that it's widely watched lends this average added import. On Monday, the 50-day moving average falls at 1,951.62.

And there's a third, more concrete reason why 1,950 is important for traders: The options market has piled on that price. Among options expiring on Friday and at the end of February, call options with a striking price of 1,950 have been the most widely held contracts trading near the money. They are also seeing the most volume of any soon-to-expire call options contracts on Monday.

With so many eyes on 1,950, some expect that trading could get a bit wonky as markets approach it.

"I expect a whoosh through… 1950 and then, as the chasers get into the pool on the long side, I'll get shorter and shorter," Michael Block of Rhino Trading Partners wrote Monday. "That's going to be when the fire starts, at least in the short term."

For those who believe the S&P will rise in the short-term only if it gets above 1,950, buying a short-term call option with a 1,950 strike price is a perfect way to express this thesis. Owning this option provides unlimited upside above 1,950, but caps the potential losses at the options premium paid.

Those eagerly waiting to see what will actually happen when 1,950 is touched likely won't have to wait long. The S&P 500 hit 1,945.81 on Monday morning — meaning the obsessed-over level is a mere 0.2 percent away from the high of the day.

Meanwhile, what if the market turns lower and fails to rise through 1,950? Well, that means the level will only take on even greater perceived importance the next time it is approached.