newbie trying to learn advandced concepts
|April 8th, 2015, 03:28 AM||#11 (permalink)|
Futures Experience: Intermediate
Platform: Think or Swim
Favorite Futures: Stock Options
Posts: 8 since Apr 2015
Thanks: 0 given, 1 received
Unusual Option Volume
I use TOS (Think or Swim Platform) with TDAmeritrade and use their scan tab / stock hacker / and select "all optionable" in there drop down menu then click on Add Option Filter tab in the drop down menu select "Volume" and then type in 5,000 as minimum and leave maximum open and then select 1,000 stocks in show tab drown down box and then click on the scan tab. I then right click on the search results bar and click customize and then I select "Call Sizzle Index" and "Put Sizzle Index" to add that criteria to my search results bar and then I sort the search results list by clicking on either Call Sizzle Index or Put Sizzle Index which gives you the number of times it's trading above it's average volume for that day. "Abracadabra" - Poof = You now have a list of stocks with unusually high call or put volume. I don't usually trade anything that doesn't have at least 5X it's daily option volume. For example: If the number under the Call Sizzle Index = 13.865, that means that particular stock / equities options volume is trading for almost 14 times or (1,400%) of it's daily option trading average. That would definitely qualify for unusual call buying or selling. I then look at IV_Percentile, if it's not listed in the search results bar, I right click on the bar and add it. I then look for stocks / equities with high IV_ Percentile 50% or better, the higher the better which usually means the stock is about to have a binary event such as an earnings release, conference call, new product release, etc. which drives huge traders to buy calls or sell puts prior to the event. Such as today Apple (AAPL) had 248,441 call contracts and 143,000 put option contracts traded an almost 2 to 1 ratio and there's been huge amount of call buying all week which looks very bullish to me. They have 2 binary events coming up.......the release of a new product = the new iwatch and a quarterly earnings report release on 04-27-2014. Therefore, I personally will be buying some call options or maybe some vertical call spreads which is the safer / more conservative trade of the two.
Lets bounce our trade ideas off of each other? I'm always looking for a better more profitable way to trade and looking for any way that I can put the odds of winning in my favor. How do you trade? What do you use to select your trades?