You might be wondering why would I want to look for unusual Options activity.
By looking at unusual trading activity, you look at them from the side of what are other people trading. It means there’s no liquidity and the stock could be heading higher or lower — it doesn’t necessarily imply direction. But it just shows you that there’s more activity there and there’s something for you to watch out for.
And if you have these things on your radar, it may give you a good indication to try a strategy now. But again, that doesn’t necessarily mean you know the direction that it’s going. You could set up non-directional trades, bullish trades, and bearish trades.
But what you can do is evaluate that there’s something going on here and that’ll give you a chance, an opportunity to trade or play.
Look at the ThinkorSwim platform here
- When we’re looking for unusual options activity, we’re should go to the Scan tab. You could also hit the [CTRL]+4 key — that’ll bring you into that area as well.
- Go over to the right and load scan — there’s a bunch of stuff like top 10 Gainers NASDAQ, top 10 sizzling stocks — it will give you some stocks right there that are sizzling already.
But what you could do is just go in, click this sizzle as well and it’ll just give you sizzling effect.
What sizzle means here is if we increase the sizzle index, it basically tells you of what a range of activity is there.
If I got like a 5x or a sizzle of five, it means it’s trading like five times larger than normal.
What I want to do is set up my own scan
Example:
- Last price — 25 dollars, at most maybe 1000 dollars.
- Volume — 100,000
- Beta — minimum of 1
- Number of results to show — 100
Hit scan. These helps us eliminates things.
Remember the more results you choose a little bit takes a little bit of time to load and then sort by sizzle index.
HASI
Here we have HASI. Pull up the chart and see some interesting activity from the option side. You can see the stock is also moving.
Now again this doesn’t necessarily mean it’s moving the most. The sizzle index is just something’s going on underneath that surface. Because when we look at the chart, it doesn’t tell me that the stock’s actually moving. The percent change would do that for you.
When you sort by percent change that is actually what’s telling you the range of movement of percentage-wise whereas the sizzle index doesn’t necessarily do that for you.
So when you look at that something’s unusual this is where you’re looking at there must be something going on.
SYNH
You can see it’s barely moving but there’s something unusual from the options side. You could do is also pull these up on this platform and you can go to option statistics.
What you’ll see is you’ve got Put Ratio Sizzle index, Call Sizzle index. Overall there are also Calls to Puts and that’s what makes it more interesting because you can see we’ve traded a thousand almost Calls but only like two Puts and that’s very unusual and different.
So looking at it just gives you an idea of like something is weird going on. And again it doesn’t necessarily imply direction but it’s just showing you something’s happening and this could mean somebody just decided “hey I’m just going to buy a thousand calls and it could have been just one person. You have no idea but it’s showing you that something’s happening in in that place maybe somebody knows something. I have no idea, but you can see this stock is kind of holding steady right now and we’ll see maybe it’ll break out or maybe it won’t but it gives you an idea that something weird is happening within that options market.
Now combine this with the net change or the percent change.
Another example, QTRX got somewhat of a sizzle and it’s also has a little bit of a percent change and that now gives you a little indication maybe something is happening with the price movement right now .
QTRX, let’s take a look and you can see it’s you know we went down here in a big way. Now we’re popping in a big way so there’s a lot of volatility going on in this area and this is again something you may want to look at.
Another example is MU MICRON, you can see it’s down about four percent sizzle index of 6.5 which means like you know six times the amount in the options side.
You can see we’re selling off and it’s kind of moving down so it just gives you an idea of hey there’s something weird going on here and the price is moving with it.
That’s how you could find some unusual options activity is just looking at the sizzle index.
It doesn’t necessarily imply direction but I’ll give you an idea there’s also a couple of cool things in here. Again, I’m not an expert on thinkorswim, just showing you top 10 gainers, losers and all that stuff. Top 10 sizzling stocks so you could do these kinds of things and it’ll pull these up as well.
And this shows you that some stocks that are moving but this isn’t always the best because you’ve got some that have very low volume.
So if I want to do something like that I might want to bump this up to like 33 dollars and scan it on my own based on also the sizzle index and that way it’s an own personal scan.
But you do have some other cool stuff in here that you could create from these scans top 10 gains or active on the NASDAQ. And you could see which ones are kind of active inactive and so forth.
There’s a lot of stuff that you could do in this scanner tab.
I just want to show you kind of the unusual options activity but you could play with it.
There’s also option hacker you could see like options which I don’t use as much or seeing like spreads what kind of spreads are people doing but stock hacker is kind of probably the bigger one that most people use.
Anyways, I hope that gives you some ideas for looking for unusual options activity if you’re just getting started or you want to see what’s something weird going on then check that out in that section.
And if you want to get some freebies that we have available to download pdf checklists. Many little courses on option trading, iron condors, calendars, diagonals that kind of stuff then check out some of the freebies that we have at this link or on our website at www.tradersfly.com.
