Millions of options trades exchange hands every day. Not all of them are made equally, that’s for sure. Some carry more information than others. Unusual option trades are that type of option trade.
Unusual option 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. This means that these are new contracts being traded, expressing a fresh opinion on the underlying.
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.
For example, let’s say a hypothetical trade happened of 5k calls which had a spread of $3.00 by $3.70, and the order was executed at $3.70. Click here to know more about #www.optionsonar.com.
Unusual option 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. This means that these are new contracts being traded, expressing a fresh opinion on the underlying.
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.
For example, let’s say a hypothetical trade happened of 5k calls which had a spread of $3.00 by $3.70, and the order was executed at $3.70. Click here to know more about #www.optionsonar.com.
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