… Unusual options activity (or "UOA") can be a "giveaway," so to speak, that there could be a large move in the underlying stock in the near future.
One of the first obstacles to interpreting unusual option volume is that, for every buyer, there’s a seller. When examining unusual options activity (specifically call buying), I am looking for these signals: Big call buying in comparison to normal trading volume; Large amounts of money put at risk by the call buyer; Repeated bullish activity day after day. When traders are optimistic about significant price movement in one direction or another, it can create high demand for the call option. Discusses "smart money" activities on options contracts with very low average volume, and what the significance may be. These options will have different strike prices and expiration dates. And because it’s impossible to keep tabs on all stocks all of the time, the Sizzle Index “quick scan” does your heavy lifting to … Volume and Volatility. 3 Unusual Options Activity Signals.
Think of it as an unusual options activity scanner that allows you to follow the money in a given stock and help you troll for potential trading ideas. Earnings season is a time when there are many stocks that have unusual options activity. In this article Tim breaks down a real example of how to read volume and volatility to identify potentially large moves in price, before they occur. Unusual Stocks Options Activity Options with unusual activity highlight puts and calls for stocks that have a high volume-to-open interest ratio. Here are some basic criteria for identifying meaningful activity and avoiding the chase for activity that ends up being useless noise. Unusual options activity (UOA) explained by Tim Biggam, an options trader of 30+ years. It’s … Unusual options activity is simply identifying specific options contracts that are trading a high amount of volume relative to the contract’s average daily volume.
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