$ZI - 🌊🔍 Flow Deep Dive per @unusual_whales 📆📈 - No filters on the below post. Highlighted the unusual trade I am going to look into, the 4K and 2.5K contracts on the $70 and $65 strike call options for 21-Jan.
TL;DR: I think they rolled their strike up and bought more.
Click on the ↕ emoji (where my cursor is) to view the trades that came in together (potentially) as a part of a strategy.
That opens up this panel which shows us the relevant trades that came in together.
On the $65C, we can see that the volume on the day was about the size of this order in fact, but the open interest was 3.8K...so we simply cannot know if they were bought or sold to open.
However, the $70C's 4K contracts was well above the 2.9K, so we can be confident these were bought or sold to open.
This determination is made if the size of the trade was greater than the chain's open interest. It's that easy!
If you click on the expirations beneath the squirrel (highlighted), another panel will open up showing you the historical volume and open interest for that options chain.
By the way! You can click on any expiration *almost* anywhere in the flow to open this next panel.
As we can see, in the $70 strike call for 21-Jan, it had an influx of volume on 14-Dec, but has steadily been around 2.5K OI, give or take, until today.
Tomorrow we can see just how much higher the OI goes (we should expect to see it around about 6.5K).
The $65 strike for 21-Jan, however, paints a different picture.
It had 4K volume on 7-Dec, but has remained around 4Kish (dropping to 3.7K) OI since then. Today's 2.5K was not enough to signify if this was an entry or exit.
OK, so, we *DO* know these orders came in together, though. But the volumes were not even, as in this was not a *symmetrical* order. Why might that be?
Go back to the previous panel and click on "Visualize the P/L of the multileg..." button, which I squirreled again for you.
That opens the UW Options Profit Calculator.
You'll see this, but... This isn't quite right.
As stated, this is asymmetrical *and* the volume on the $65C was not over OI.
Floor traders making completely OTM, naked bets?
Willing to lose 1.3M on a gamble? I think not!
Review my thread on why I doubt floor traders be setting up in such a way here:
From that thread, you will read that there is a low statistical chance that is what is happening (floor traders taking on an OTM position as this for such a timeframe).
So now that we know this, I think this trader is just ROLLING their contracts up to a higher strike.
Am I right? I don't know yet! We will see at tomorrow's open with the changes to OI.
This is but a walkthrough on how to figure this out for yourself so that you do not follow a bet that might actually not be *quite as bullish* as you were led to believe at first.
Let me know if this helped and I will gladly write out more guides!
Rolling a strike just means they are closing their current position and then buying new contracts at a higher strike.
(You can also roll out expirations, so close current expiration, and then buy same strike later expirations, same meaning).
This implies they are still believing in their original thesis, and the trade is still "on" so to speak.
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You're always trading around volatility, such as from earnings reports (ER).
In the @unusual_whales flow and on its alerts, there are a couple of emojis to denote an upcoming ER:
⌛ - ER within 14 days
🦄 - ER w/in a week
There is a lot more to volatility than just ERs, though:
Implied volatility (IV) is a measurement of volatility.
It is one of the measurements used to price options contracts and as an indication of how much (in *EITHER DIRECTION*) a stock could move in the future.
As pricing changes in real-time, so too does IV.
By the way, you can see a ticker's IV in the @unusual_whales flow by going to "Table Settings" and toggling it on (pictured).
The @unusual_whales intraday analyst is perhaps the most powerful page on the platform. It's home to many tools, such as but not limited to biggest options trades and P/C ratios (read about that here:
Scroll down to the highlighted section, just below the OI/volume changes charts.
(Be warned, large vertical image!)
As to not bury the lede, I'll review quickly how max pain *MIGHT* be useful to some:
Those who use it speculate that as options' expirations draw closer, the market makers (and other option writers) will buy or sell shares in order to drive the stock price to the max pain price.
But I do not (yet) treat them differently than other codes until I see complete DD to support the trade idea.
What is a "sweep" trade?
An options sweep (or sweep-to-fill) occurs when a broker splits an order into many parts in order to get the best possible pricings currently offered on the market.
These orders can often be filled across multiple exchanges and the broker will continue to fill the order lot by lot, always for the best possible price, until the order is completely filled.
@unusual_whales posts unusual option alerts throughout the day.
The most consternating thing about them are the emojis, so I'll go through some of the most important ones, as well as defining all of the aspects in an unusual alert.
Please note that these alerts are *NOT* buy or sell signals; they are alerts of unusual activity as determined by the @unusual_whales algorithm/bot.
How alerts work (from the docs!):
- When unusual activity has been detected, these trades are placed into an alert queue.
- Alerts may be trigged by one or more transactions and are not always the movements of a single trader.
- You can view the trade(s) that triggered the alert by opening an alert.
- There may be a delay between transactions that trigged the alert and the alert itself being issued.
Open interest (OI) can be confusing and sometimes misleading.
I will try to take this piece by piece.
However, as to not bury the lede, I'll quickly review one particular trick as to why OI is important when looking at the @unusual_whales flow:
In the flow, trades appended with 💼 can be intuited as bought or sold to open. This determination is made if the size of the trade was greater than the chain's OI.
Be mindful! Trades without the 💼 symbol might still have been bought or sold to open!
This is why OI can be useful, but what even is it?
Open interest (OI) defines how many contracts are not yet settled by the end of the day; in other words, how many contracts are being held that have not yet found the opposite side: a buyer for a seller or a seller for a buyer.