unusual options activity scanner thinkorswim
To use with call verticals. Traders today keep a close eye on volume and of trades to see if someone thinks a big move is coming. There are inherent risks involved with investing in the stock market, including the loss of your investment. It may not display this or other websites correctly. Making money trading stocks takes time, dedication, and hard work. You see, if this was an exiting position, there would have been at least 6,500 contracts of open interest. Orders should be on the ask side, sometimes you’ll see some that are above the asking price, Avoid orders that have the earnings month, as they are most likely a play on earnings, Relative size is more important than actual size; anything above 5X is worth looking into, Pay attention to relative stock volume too; stocks that trade less volume and have options that are are worth examining. That would mean you could end up losing more than you wanted because of an opening gap lower. JavaScript is disabled. The bottom line? A couple of minutes before the close on a Friday, a trader came in bought 4,674 PCG 12 puts for $1.00 per contract. Volume should be greater than open interest – opening position. Furthermore, its best paired when you know things about the company or the story. An unusual options activity order is one that stands out and is relatively large, so this definitely looks like unusual options activity. In other words, it’s not the size that matters, it’s the relative size. Way back in the day, it was easy to identify when there was unusual options activity. For example, if shares of the stock plummet, your stop might not work. We know the trader spent over $650K on this one single trade. This means that if you see unusual options activity, it could be because a large hedge is taking place, as opposed to someone expressing a directional view. There are a lot of scanners/screeners available that scan for unusual options activity, and a lot of trading platforms have this functionality build into their platforms. Delphi has earnings after the time of the unusual options activity. Every time a high volume options appear in the " options times and sales" can also show in the indicator in the chart. Before getting into the specifics, familiarize yourself with the Stock Hacker screen, located under the Scan tab in the thinkorswim platform (see figure 1). Oftentimes the seeds of a catalyst, whether or not it was transparent, are planted in the price action leading up to it. Clearly, we are not dealing with a mom and pop trader here. Maybe a call options in a green bar and put options in red bar and also showing the numbers of calls and puts? Thanks. Become your own detective and try to figure out why someone might placing an unusual options activity. Look for repeat offenders. Here are a few things to watch out for if you’re monitoring for unusual options activity: If the trade took place above the midpoint or on the ask, it’s typically buyer-initiated. So consider adding the Trade Flash gadget or check to see the biggest options trades of the day. That said, buying calls is usually not as risky as holding a stock position before its earnings event. When activity on an option starts to look unusually high, it is a signal of unusual options activity. On a particular day, there were 6,738 calls of Delphi Technologies (DLPH) traded. That said, the 6,500 calls that traded is an opening position. Get all of Hollywood.com's best Celebrities lists, news, and more. Turns an unsecure link into an anonymous one! Running over 2.5 hours, this workshop shows the ins and outs of … Maybe they are informed. Anyway to find nearest ITM option call for a given number, Display implied variance (impl vol squared) in option chain columns under trade tab, OI of 5k or less - Usually indicates fresh volume coming in or the part where Unusual comes from, Delta 0 -> 40 - You can fine tune this as you see fit. When a stock suddenly increased or decreased in trading volume, that means it's being traded at an unexpectedly high level and a lot of traders often take advantage of this. Sometimes these trades can go on for a long period of time. Why would anyone put a large sum of money on an option trade, one so large to execute that the trade must be placed with a floor broker? Using the Sizzle Index as a personal scanning device for unusual options activity can be done in four steps: scan, compare, refine, and save. Those puts … rose by more than 366% in one single day. There are hundreds of large option trades that are placed daily. So how can we figure out the juicy trades from the noise? I'm confused you say the 10K volume was on 23 strike, but the pic shows it at 22 strike, is that just a typo or am I reading this incorrectly, Great thanks, just wanted to make sure I wasn't missing anything, but thanks for this, it looks very promising, will try it out, as long as Trump can keep his hands of twitter and causing markets to dive. Create a new indicator in ThinkorSwim and import this code. Additionally, if those big institutions were to withdraw their investments, it could heavily impact the market. It could be very well that this trader is playing the earnings event. I noticed that there is not very much information out there on the Options Hacker scanner for TOS. Optionsonar - Unusual Options Activity & Order Flow Scanner FlowAlgo - Options Flow & Unusual Options Activity Scanner TrendSpider - Technical Analysis Scanning, Backtesting, Alerts … However, put options work best during bearish markets. In other words, the trader was relatively aggressive because they bought near the asking price. Because of that, I wanted to do a quick ThinkOrSwim tutorial on Options Hacker and at least note some of the differences between it and Stock Hacker to clear up some of the confusion. At the time of the trade, the stock was trading at $17.50. For example, PCG had puts trade on different strikes and expiration periods. Call options work great in any market environment. You see, when you buy a call option your risk is limited to the premium you spend. In our books, an unusual options activity order is one that stands out and is relatively large. Now, this isn’t a different asset class, it’s just a term used to describe stock options that are experiencing greater than average volume. Bloomberg delivers business and markets news, data, analysis, and video to the world, featuring stories from Businessweek and Bloomberg News on … Past performance in the market is not indicative of future results. Something important to keep in mind is that the stock market today is primarily owned by large institutions. However, when those trades do work, they often give the strongest rates of return. If you give me 7 days… I’ll make you a better trader. What if you could legally steal some of the best ideas from the largest players on Wall Street? There are two types of catalysts that can impact the stock market: transparent ones and unexpected ones. If they took profits, the trader made approximately $1.5M in profits. If you want to consider some paid scanners with additional features, some options to consider are: Like any indicator, scanning for unusual options activity doesn’t work 100% of the time. Do you have an example of a good scanner for breakouts? Is there an indicator to show the unusual options activity indicator in the chart using the "options times and sales" statistics. Options are traded regularly in options markets. That’s why it’s so important to have a big picture view of a company, to know things about the company and what may be coming, versus relying on unusual options activity alone. Options that are experiencing unusual activity on more than one line are more interesting. I try to stay close to the money, DTE 14 -> 100 - Best for getting long term ones that come here. Read Order Flow To Recognize Unusual Options Activity Workshop. Here’s what we know about the Delphi trade: During the time of the trade, the March 17.5 calls traded for $1.00. An unusual options activity order is one that stands out and is relatively large, so this definitely looks like unusual options activity. I've traded for a long time and wanted to share something - hopefully no one is offended by my post. Because of that, 6K contracts traded in DLPH is considered unusual, whereas 2.2M contracts traded in SPY is not. However, the spread on the trade was in $0.85 by $1.05. On this particular day, it traded about 11 times its daily average. You see, there were rumors that the utility company would not be able to support itself after facing liability charges of $30B or more for recent deadly wildfires caused in California. If you don’t have any information about an upcoming event, your only option is to consult the charge and guess what could be happening. Scanning with Options Hacker: A ThinkOrSwim Tutorial. Does this mean that Delphi is going to rise ahead of its earnings release? 1. When those institutions sense volatility in the future, whether in the form of upcoming news or a potentially negative earnings report, they choose to protect their downsides by buying options. Now, most trading platforms will provide options information like volume, open interest, the price range of the option strike. Some examples of unexpected catalysts include events like an unforeseen comment from a CEO, an activist investor taking a position in the company, or a black swan event like a catastrophic safety issue. You are using an out of date browser. With trading floors mostly gone today, that strategy no longer works. You must log in or register to reply here. Any investment is at your own risk. However, their daily average contracts are 3.8M. For example, here is what an options chart on Thinkorswim looks like: As you can see from the giant cyan (blue-green) volume bar, there were an unusual amount of options traded on the March 17.50 calls in Delphi, which is much higher than the fuchsia (pink) theoretical line on the graph would predict. Other times you’ll find that it was an indicator something was happening. Free anonymous URL redirection service. Lots of buzz around Unusual Option Activity (UOA) so thought I'll share out this scanner that I fine tuned for my personal use. Unexpected catalysts are events that aren’t disclosed in advance and come out of nowhere, with no press announcement. Learn how to use unusual options activity to trade like top hedge fund managers and other institutional traders. Not necessarily. Not only that but those contracts had an open interest of about 300 contracts. Do you think that will be possible? The following trading day, PG&E, California’s largest utility company was going to be filing for bankruptcy. Sometimes you can, if you follow unusual options activity. Of course, at the end of the day it’s all speculation, but here is what I look at: Sometimes you’ll see unusual options activity before options expiration. Yes, that means reading the news, even though a lot of what’s out there is junk. Regardless, using unusual options activity data can be helpful in your decision-making process when you’re trading. To put this in perspective, let's look at an example of SPY options contracts. Now, this was a fairly massive bet, especially when you consider how far out-of-the-money these puts were. To put this unusual options activity into perspective, on that same day, over 2.2M options in the SPDR S&P 500 (SPY) contracts traded. For a better experience, please enable JavaScript in your browser before proceeding. High-quality unusual options activity doesn’t occur every day. Let's Put This in Perspective. Traders would simply take notice of an uptick in activity on the trading floors and other floor traders often piggybacked on those orders. According to the rules of the game, every option trade that is placed (electronically, on or off the trading floor) must be reported and made publicly available. Results may not be typical and may vary from person to person. However, if you were following PG&E story closely, this bet was not as crazy as it appears. For example, a trader can be successful, then close out that position and roll over to the next contract. On average, Delphi only trades about 600 option contracts per day. In other words, if this trade is a stock substitution, where the trader is replacing the stock with calls then this trade is not as bullish as it first appears. However, some free platforms that you can use are ThinkOrSwim and Barchart. Furthermore, Delphi has earnings after the date of the unusual options activity, and these calls that were bought cover the earnings date. DLPH definitely looks like unusual options activity considering it was trading 11 times it's daily average. Moreover, option trades that have more volume than open interest look more compelling for possible trade candidates. Transparent catalysts include events like the release of an earnings report, a product launch, or a dividend announcement. It’s worth tracking because you want to follow other successful traders. However, their daily average contracts are 3.8M. It’s unpredictable. The biggest options trades of the day are listed at the top. I wanted to add a note of caution here and I'm not encouraging or discouraging anyone from pursuing any idea. Here is a scanner that will help you screen for stocks with unusual volume in ThinkorSwim. Lots of buzz around Unusual Option Activity (UOA) so thought I'll share out this scanner that I fine tuned for my personal use. They may not be as large the the ones you find on Trade Flash, but you get to see which options are trading actively during the trading day. If it took place below the midpoint or on the big, it’s usually seller-initiated. They often build positions in stocks over a course of several months with the intention of hanging onto the stock for the long term. To put this unusual options activity into perspective, on that same day, over 2.2M options in the SPDR S&P 500 (SPY) contracts traded. However, because they’re trading their clients’ money, they don’t want their clients to withdraw their investments out of fear. These institutions want to hold onto the shares of stock they hold. We use an unusual options activity scanner. For these reasons and more, it makes the most sense for those institutions to buy options to reduce their short-term exposure versus actually selling their shares. The scanner looks for the following: Option Volume of 10k or more; OI of 5k or less - Usually indicates fresh volume coming in or the part where Unusual comes from; Delta 0 -> 40 - You can fine tune this as you see fit.