Options Basics

How to Read Options Flow

Options Flow is a trading tool retail traders use to analyze opportunities that institutions are pursuing with substantial capital allocation. Learning how to read options flow will allow you to navigate the jungle of institutional order flow data with precision.

Options Flow Order

XLF Options Flow Order via TitanFlow

Ticker - Located in the top left, the ticker is the underlying asset of the options flow order.

Order Sentiment - Located to the right of the ticker, the order sentiment is displayed as bought (order sent at ask), sold (order sent at bid), Bought AA (order sent above the ask), or Sold BB (Order sent below the bid).

Expiration - The expiration date of the options contracts, located below the ticker

Strike - The strike price of the options contracts, located below the contract expiration

Spot - The price of the underlying asset at the moment the options flow order was sent into the market. Located to the right of the strike price.

Date and Time - Located across from the ticker, displays the exact date and time the options flow order was sent into the market.

Total Premium - The amount of money the options flow order costs, located below the date and time.

Contract Price - The bid or ask price the institution has sent the order at. Located to the right of the total Premium.

Volume and Open Interest - The total volume for the option contract on the day at the time the options flow order is sent is displayed as Vol. The amount of contracts that existed in the market heading into the current trading day is the Open Interest. Both of these are displayed below the premium and contract price on the right side of the order.

Contract Type and Status - The contract status is defined as either out of the money (OTM) or in the money (ITM). The contract type is defined as a call or put. Both are located below the volume and open interest.

Order Type - Located to the right of the contract type, options flow orders are either multi-exchange transactions on the public market (sweep) or single, privately negotiated transactions (block).

Options Flow Chart via TitanFlow

Clicking into an options flow order displays a chart of the underlying ticker’s price action with flow and darkpool detection price levels plotted.

Related Flow and Darkpool Prints via TitanFlow

If you scroll down below the chart, you’ll get a list of any similar recent flow or darkpool orders.

Identifying similar flow is important when analyzing options flow because of what it indicates. Multiple options flow orders of the same ticker with similar details such as sentiment, expiration, and strike, can indicated unusually aggressive institutional activity in the future direction of an asset. Big money moves the market, so identifying patterns of similar sentiment can point us in the direction of profitable opportunities. We discuss this in much greater detail in our Unusual Options Activity article.

Increased darkpool activity often acts as the catalyst of a breakdown or breakout. If you’re feeling extra ambitious, check the historical darkpool activity on a ticker to identify potential levels of support and resistance. Check out our article on darkpool to learn how to implement this tool into your trading for an added layer of confirmation in the decision making process.

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