How to Find Unusual Options Activity

By Intrinio
April 2, 2024

In the dynamic world of options trading, staying ahead of market trends and identifying potential opportunities is crucial for investors and traders alike. One strategy gaining traction among market participants is monitoring unusual options activity. But what exactly does this entail, and how can you effectively find and capitalize on such activity? In this comprehensive guide, we'll delve into the intricacies of unusual options activity, explore its significance, provide tips for identifying it, highlight essential tools for tracking it, and reveal where you can access valuable unusual options activity data.

What is Unusual Options Activity?

Unusual options activity refers to significant trading volume or price movements in options contracts that deviate from their typical patterns. This activity can manifest in various forms, including unusually high trading volume, large trades, or notable changes in open interest. Traders often monitor unusual options activity as it may indicate potential market-moving events or significant shifts in sentiment among market participants.

Why Should You Monitor Unusual Options Trades?

Monitoring unusual options trades offers several benefits for traders and investors:

  • Early Detection of Market Moves: Unusual options activity can serve as an early indicator of potential market moves or changes in sentiment. By identifying unusual activity before it impacts stock prices, traders can position themselves to capitalize on emerging trends.
  • Insight into Institutional Trading: Unusual options activity often involves large institutional trades, providing insight into the actions of sophisticated investors and institutions. Tracking such activity can help retail traders gauge institutional sentiment and potentially follow suit.
  • Identification of Trading Opportunities: Unusual options activity may uncover trading opportunities that would otherwise go unnoticed. By identifying stocks with significant options activity, traders can conduct further analysis to identify potential entry or exit points for their trades.

Tips for Finding Unusual Options Activity

While identifying unusual options activity requires a keen eye and thorough analysis, here are some tips to help you get started:

  • Monitor Volume Spikes: Look for sudden spikes in options trading volume, particularly in contracts with significant changes in open interest. These spikes may indicate heightened interest or potential market-moving events.
  • Focus on Out-of-the-Money Options: Unusual activity in out-of-the-money options contracts, particularly those expiring in the near term, can signal speculative bets or hedging strategies by traders. Pay attention to any significant changes in trading volume or open interest in these contracts.
  • Watch for Large Trades: Keep an eye out for unusually large trades, as they may indicate institutional activity or significant market sentiment shifts. Large trades can have a substantial impact on options prices and may signal potential opportunities for traders.
  • Follow News and Events: Stay informed about news and events that may impact options trading activity, such as earnings announcements, mergers and acquisitions, or regulatory developments. Unusual options activity often coincides with significant market news or events.

Tools for Tracking Unusual Options Activity

Several tools and platforms can aid in tracking and analyzing unusual options activity:

  • Options Screener: Utilize options screeners offered by brokerage platforms or financial websites to filter options contracts based on criteria such as volume, open interest, and price movement. These screeners can help identify unusual activity across a wide range of options contracts.
  • Volatility Skew Charts: Volatility skew charts display the implied volatility of options contracts across different strike prices and expiration dates. By analyzing volatility skew patterns, traders can identify areas of unusual activity and potential trading opportunities.
  • Heat Maps: Heat maps visually represent options trading volume and open interest across different strike prices and expiration dates. Heat maps can help traders quickly identify areas of unusual activity and focus their analysis on specific options contracts.

Where to get unusual options activity data

Accessing reliable and comprehensive data on unusual options activity is essential for informed decision-making. Intrinio offers a robust platform for accessing options data, including detailed information on options volume, open interest, and price movement. With Intrinio's options data feeds and analytics tools, traders can monitor and analyze unusual options activity in real-time or on a 15-minute delay, enabling them to stay ahead of market trends and identify potential trading opportunities.

It’s super easy to get started accessing unusual options data from Intrinio. Chat with us live on the website or fill out a quick consultation form, and we will get you on a free trial immediately. You can access unusual options data via our 15-Min Delayed SIP data feed or our Real-Time Options data stream. Both of these packages come with a 2-week free trial, great documentation, support, API, webSocket and CSV access & more.

In conclusion, monitoring unusual options activity can provide valuable insights into market sentiment, institutional trading, and potential trading opportunities. By understanding what constitutes unusual activity, employing effective strategies for identifying it, leveraging essential tools for tracking it, and accessing reliable options data from platforms like Intrinio, traders can enhance their decision-making process and maximize their trading success in the dynamic options market.

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