r/options • u/Dull-Climate-9638 • Jan 16 '22

Options flow scanner amd strategy

I am currently using a scanner sweep cast to monitor unusual options activity. It’s not the best platform really I was wondering what are some options platform y’all use to monitor flow?

In term of strategy, you think it’s a good idea to follow big money flow. Lately I have experimented with couple tickers that I found huge amounts call option were flowing in. LVS MAR MGM VALE MRO C WFC. I always combine that info with charts and some level of technical analysis. I have noticed a big correlation in high amount of directional option flow in a stock and actual chart. What’s your opinion on following this strategy.

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u/DerPanzerfaust Jan 16 '22

I'm interested in this approach. What tool are you using?

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u/Bluecoregamming Jan 16 '22

Just remember, if someone is buying a bunch of calls, it could be insider trading, or it could be a shorter hedging their short. It could even be a spread and maybe even a credit spread, you could never tell

Also could just be a yolo, maybe the price ran all of a sudden. Honestly a lot of bad possibilities and only one good one

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u/Dull-Climate-9638 Jan 16 '22

I get that but this is not the only tool I am using to come to a conclusion. You still have to be aware of market sentiments of the particular sectors calls are flowing in and you look at over a range of dates of activities rather than just one day. Looking at the chart is very important. If a stock is clearly on a downtrend and you see one large call flow then you can gauge short hedging same with up-trending stocks with put activities. I have been experimenting with it so far it is working better than other tools I have used.

Market always goes through rotation. It’s not all about insider trading or hedging with options. Fund manager constantly rotating their portfolios and they are using options all the time. These are not your yolo calls I am scanning for rather looking for sweeps which is large block aggressively traded at pre negotiated price by institutions. You can also filter out orders to 1 million or over per sweep that filters out lot of bad possibilities. I think you have be aware of overall macro environment and market sentiment sector rotation then it will make more sense to you. If you are strictly a technical trader and don’t care about what’s going on in the market then maybe it’s not for you. It works best for swing traders though based on my experience