A trader bought 1,000 QTWW Jan 2.5 Calls for $0.30 (5.5 times usual volume) with stock at $2.39
A trader bought 5,469 DVY Oct 67 Calls for $0.34 (6.3 times usual volume) with stock at $66.15
A trader bought 900 DBC Oct 27 Calls for $0.25 (5.5 times usual volume) with stock at $26.24
A trader bought 828 MDC Dec 32 Calls for $1.65 (2.8 times usual volume) with stock at $29.54
We define unusual option activity as large block trades that represent a large percentage of daily option volume. The block trade is considered “unusual” if the option volume is above the average daily volume over the past 22 days. At KeeneOnTheMarket.com we scan and analyze order flow from all of the major options exchanges in order to identify any unusual option activity.
Analyzing unusual order flow gives traders a window into what the positions that large institutional players have. The majority of unusual option activity can be traced back to hedge funds, mutual funds, and other large institutions. Knowing where these institutions are placing their bets can be hugely advantageous for any trader. These institutions have informational and technological advantages that the average trader doesn’t have, and the amount of time and analysis that goes into every one of their trades is substantial. We offer this service through our 7 hour daily LIVE trading room http://bit.ly/135QWt8 or through Premium Twitter feed with all entries, exits, and unusual options activity tweeted all day long: http://bit.ly/11f0L9u .
Order flow can however at times be deceiving. One might logically think that a large block buyer of calls is bullish on the underlying. This is not always the case. Remember that a large number of participants in the equity options market are hedgers. Long calls are a hedge against short stock, and long puts are a hedge against long stock. With this in mind we have developed a 7 step trading plan that helps filter out unusual option activity that will not provide actionable trade setups. It is by using this plan that we are able to identify the most significant unusual options activity trades every day.