This information can provide you with advanced market awareness and give you an edge over other investors. You can take advantage of alerts, notifications, watchlists and provide yourself with full market awareness by taking advantage of the incredible features that Option Sonar provides.īar Chart is an excellent internet-based resource that provides public investors with tons of real-time stock options trading information. You can be among the first investors to know when unusual activity occurs on a particular option contract. Option Sonar is a highly reputable unusual options activity scanner that can provide you with the resources to detect unusual options activity in the stock market accurately. However, this isn’t always the case which is why it is essential to find a high-quality, reliable scanner that accurately detects unusual stock options activity. Significant increases in trading volume can sometimes indicate unusual activity behind the scenes, which can sometimes indicate a price fluctuation on the stock price before it happens. That’s a great question, and the answer is usually related to the current trading volume of a specific stock option contract and how it compares to the average volume per day. What is Unusual Option Activity?Īfter reading the previous section, you’re probably asking what precisely unusual activity for stock options is? If you have the right resources at your disposal, it can provide you with a significant edge in the stock market. The easiest way to find unusual activity in the world of stock options is to use a reliable scanner that analyzes the stock market for this type of activity explicitly. Thus, if you spot unusual activity when trading stock options, it might provide you with an opportunity to take advantage of the situation. When this happens, signals are sometimes available for individual investors that take part in trading options. Large corporations and institutions are frequently coordinating when they make a significant trading decision. This guide will show new investors why it might be beneficial to find unusual options activity and how specific scanners can help you with that process. This is a fair question that many new investors may be asking after learning about stock options and trading strategies. What is an unusual options activity, and why might you want a scanner to look for it? Final Summary: Unusual Option Activity Scanners. Please leave your thoughts in the comments section below. For the latter case, the exposure a large investor has on their short position in common stock may be more meaningful than bullish options activity.Today, we’ll talk about where to find free unusual option activity scanners, a topic you requested me to write about. An observer cannot be sure if the bettor is playing the contract outright or if they're hedging a large underlying position in a common stock. Options are "bearish" when a call is sold at/near bid price or a put is bought at/near ask price.Īlthough the activity is suggestive of these strategies, these observations are made without knowing the investor's true intentions when purchasing these options contracts. Options are "bullish" when a call is purchased at/near ask price or a put is sold at/near bid price. These trades are made with the expectation that the value of the underlying asset is going to change dramatically in the future, and buyers and sellers will benefit from a greater profit margin. "Out of the money" contracts occur 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 in this context because it represents the difference between the strike price and the value of the underlying asset.Ĭontracts that are "out of the money" are also indicative of unusual options activity. Generally, additional time until a contract expires increases the potential for it to reach its strike price and grow its time value. The trading of a contract with an expiration date in the distant future is another sign of unusual activity. A contract cannot be considered closed until there exists both a buyer and seller for it. The number of contracts that have been traded, but not yet closed by either counterparty, is called open interest. 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. Following the unusual option alert, the stock price moved down to $14.22. Shares of Macy's (NYSE: M) saw some unusual options activity on Tuesday.
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