Options are "bearish" when a call is sold at/near bid price or a put is bought at/near ask price. Options are "bullish" when a call is purchased at/near ask price or a put is sold at/near bid price. Following the unusual option alert, the stock price moved down to 22.53. These trades are made because the underlying asset value is expected to change dramatically in the future, and the buyer or seller can take advantage of a greater profit margin. Shares of Palantir Technologies (NYSE:PLTR) saw some unusual options activity on Tuesday. This occurs when the underlying price is under the strike price on a call option, or above the strike price on a put option. Time value is important to consider because it represents the difference between the strike price and the value of the underlying asset.Ĭontracts with a strike price far from the underlying price are also considered unusual because they are defined as being "out of the money". Usually, additional time until a contract expires allows more opportunity for it to reach its strike price and grow its time value. a buyer finding a seller, or a seller finding a buyer).Īnother sign of unusual activity is the trading of a contract with an expiration date in the distant future. In other words, open interest represents the quantity of contracts that individual parties have written but not yet found a counterparty for (i.e. On the thinkorswim platform’s Scan > Stock Hacker tab, select the flame at the top right that represents the Sizzle Index.This will prefill the Stock Hacker with the parameters to find the securities with a per-share price above 5, volume above 100,000 shares, and market cap above 35 million that have the most unusual options volume. Open interest is the number of unsettled contracts that have been traded but not yet closed by either counterparty. The volume of options activity refers to the number of contracts traded over a given time period. One way options market activity can be considered unusual is when volume is exceptionally higher than its historical average. ![]() ![]() After the option alert, the stock price moved up to $442.02. Optionsonar makes it very easy to stay in the loop on the latest unusual options activity by using a proprietary algorithm that was once only available to institutional traders on Wall Street.On Friday, shares of SPDR S&P 500 (NYSE:SPY) saw unusual options activity. Unusually large purchases of options contracts indicate that someone thinks there is an impending event that will move a stock in a big way. This paired with the unusual high daily volume and size of the trade makes this type of trade very interesting, carrying a signal that there is a likelihood of a potential large move in the underlying stock. To me, that says they have high expectations for this trade, and saving $175K is chump change. Now, if they tried to middle their order, say $3.35 and got filled, they could have saved potentially $175K, but they didn't. The trader bought 5k calls, dropping $1.8M on the trade. Why is this interesting? Well given a large enough trade and it being bought on the ask or sold on the bid it shows extreme urgency on the trader's side.įor example, let's look at trade happened of 5k calls which had a spread of $3.00 by $3.70, and the order was executed at $3.70. This means that these are new contracts being traded, expressing a fresh opinion on the underlying stock. Unusual Options Activity refers to a significant change in the trading volume of options contracts for a particular stock, index, or other financial instruments. Unusual options activity refers to significant trading volume and price movement in options contracts that deviate from their normal patterns. Extraordinarily large volume (compared to. The stock price moved down to 4.43 following the option alert. UOA revolves around the trading of option contracts at volumes significantly higher than their daily averages. ![]() Unusual options activity is defined as a single trade that is bought on the ask or sold on the bid, with unusual volume and/or trade size compared to the open interest for that particular strike and expiry. AMC Entertainment (NYSE: AMC) shares experienced unusual options activity on Thursday. Understanding Unusual Options Activity (UOA) Before delving into why UOA may not be a reliable strategy for consistent profits, it's crucial to understand what unusual options activity (UOA) entails. Unusual option trades are that type of option trade. Not all of them are made equally, that's for sure. Unusual Options Activity identifies options contracts that are trading at a higher volume relative to the contracts open interest. Millions of options trades exchange hands every day. View all unusual options activity for Tesla stock ![]() This is a big bullish bet that the stock would reach $450 by the end of the week Friday. 4, 2020 - PRLog - Tesla stock saw over $12 million out of the money call options trade this week.
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