TipRanks continues to level the playing field for investors. The world of options is lucrative and intriguing at the same time. We recently launched the Options Tool to help investors navigate the vast data around options contracts and devise the most profitable strategies.
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Now, we are introducing the Unusual Options Activity feature to help you spot activity that may seem abnormal and potentially lead to profitable opportunities.
What is Unusual Options Activity?
Unusual Options Activity refers to order flows in the market that stand out from the normal trading patterns in terms of volume, price, open interest, or a combination of these factors. And this can be an important indicator of upcoming events or things to come.
To locate the Unusual Options Activity feature for any ticker, click on “Options” on the left navigation panel of the stock. You can find the feature right below the Next Earnings Date for the ticker and above the selection panel for Expiration Date, Option Strikes, and Table View.
Unlocking New Options Opportunities with TipRanks
To navigate to the Options Tool for any stock, click on “Options” on the left navigation panel of the stock. You can find the tool right below the Technical Analysis tool and above the Chart tool. For example, on September 22, 2023, Amazon (AMZN)’s Options page displayed the following, ahead of its October 26, 2023 results. AMZN’s Options page displayed the following details.
When you click on the “See Unusual Option Activity for Amazon” feature, you can see activity in multiple contracts by date. You can choose to view only Call or Put options or both using the “Type” drop-down tab and combine the selection with Bullish, Bearish, or Neutral trade sentiment with the help of the “Trade Sentiment” drop-down tab. Bullish or Bearish sentiment hints at possible movement in the contract, but it is only an indication and not a certainty.
Next, you can further segregate the results by Date, Sentiment, Contract type (Call or Put), different Strikes, Date of expiry, Volume, Open Interest (OI), or the relative change between Volume and OI.
In the above example, we have chosen Bullish Calls. We can see that the $145 Strike Call expiring on October 20 had an unusually large trade volume relative to the OI in August.
Finally, it pays to look at more than one side of the same event. Along with unusual activity in options, your research can become more nuanced by looking at fundamentals, news, technical indicators, and moves by insiders or hedge funds, all of which can be assessed via the tools available on TipRanks.
Terminology
Volume – Volume represents the total number of options contracts traded today or as of the last trading day.
OI – The Open Interest (OI) is the total number of outstanding options contracts in the market. This represents the level of liquidity and market participation for the contract. The higher the OI, the better, as it gives more trading opportunities and efficient pricing.
Last Trade – The Last Trade gives you the details of the time and date of the last traded contract.
Strike Price – The Strike Price in an options contract is the predetermined price at which the underlying security can be bought or sold once exercised. The strike prices are typically set above or below the current market price of the underlying security at regular intervals.
Sentiment – Sentiment (Bearish or Bullish) in a contract is determined by considering the volume, OI, and the closing price. For instance, the sentiment for a Call option is Bullish if the volume surpasses the OI and the closing price of the contract for the day is greater than the previous day’s closing price.
Summary
Trading in Options, especially retail participation, has exploded over the past few years. With retail investors and traders in mind, TipRanks continues to bring new and innovative features focused on this segment. These tools and data sets were previously only available in the realm of larger market participants. We continue to democratize information and tools so that our subscribers can focus on what matters…profits.
