[THINKORSWIM] Unusual Options Activity | TOS Sizzle Index | UOA Options Trading Strategy



what's up everybody Jonathan Rose owner masters in trading I just got off an awesome coaching call with my good friend and we were talking about the toss thinkorswim sizzle index after I got the call I thought you know what I gotta make a video I think everybody will benefit from this so here goes thinkorswim we are using the sizzle index the sizzle index is a feature that allows you to find stock symbols that currently see an increase in the number of options traded compared to the last five days the idea of the sync of the sizzle index a it's a pretty simple way to find unusual options activity to find catalyst for a trade unusual options activity is when you see a really big order that's not in line with the normal volume and open interest of a given stock or option so basics can I really didn't do anything special I was just looking at the call sizzle index the put sizzle index early on in the search we came to a Torah biotherapeutics atra a tra call sizzle index is calling it 8 the next thing I would do is pull up the stock pull up the options looking at volume looking at open interest now open interest is updated every evening volume is updated every day so 201 these are the or this is the volume traded on the 25 strike today tomorrow these 201 will either add to this number or will reduce to this number depending on whether it's initiating a position or covering a position this to me seems pretty notable actually let's talk about this we have 2000 here we have 2000 here now 2000 open and trust stocks at 1853 10 days until expiration 2000 on the 25 strike would me if a t-ara or a tra Atari biotherapeutics or Tora gets above $25 within 10 days the owner of these calls is gonna find himself long 2,000 options 2,000 times 100 is 200 thousand if a tra gets above $25 within 10 days my friend right here is gonna be long 200,000 shares of stock that my friends is a big order that's unusual option activity now 2,000 in a name like Apple no big deal right drop in the bucket but in Atari a tra ATAR uh pardon me 200,000 shares is five times the stock volume that is a big big order using the thinkorswim sizzle index can bring things like this to your attention down here scroll down options time and sales you could start figuring out what that order was it looks like at least 50 of it was done at 8:40 at a price of 30 cents at an Ivy implied volatility of a hundred and forty-three implied volatility is 102 a hundred and forty-three volatility or 115 in July most likely means that they were buying these options because if you sell the 30s the volatility is going to be probably about 105 if you buy the 35 the volatility is probably going to be about 130 the next thing that you should do whenever you find unusual option activity is go to the chart I'm at the chart right now you can see each row a tra Uttara was trading in the mid 40s it got crushed now it's down to 1852 if I put on a one-minute we can start seeing when these orders came and how the market reacted to those orders a tra if I go back to time and sales let's just look actually at those 25 calls sold ago July strikes 25 s good 25 s all of it done like at 8:40 this morning all of it done at 8:40 this morning 902 fine but most of it 840 let's go back to that chart let's look at a one minute 8:40 here's the opening 835 836 837 838 839 8:40 so the order put the market up because it did need to get filled not surprising it came right back down it's my strong opinion that whoever bought these or rubber traded these was buying these options so if they're buying these options what do they think is gonna happen well they believe atra will be trading above 25 within 10 days the next thing that we should do and we did this on the coaching call with my client is you need to find out why why the heck is anybody buying 200,000 shares of the underlying or 2,000 shares of the options on the 25 strike with only 10 days to go or they're reporting earnings no or is there a big announcement that's coming out maybe we have to do the research so overall what are we to do well I'm a big believer and you don't mess around the neutral options activity they know more than we do we have to give them the benefit of the doubt researching a ta ra and that's the first time I've ever heard of this stock it looked like they preen out some data but still that doesn't give me a strong enough catalyst to get up to 25 research figure this out why would a stock thirty percent within ten days there's a reason I'm looking at it I don't know what the exact reason is right now but I have a pretty good feeling that these guys who bought the twenty five strike know what they're talking about we have more drilling in to go but this is the information that you need to make good trades I'm gonna keep digging into this I wanted to let you guys in up on what I was working with if you have any questions leave comments below thanks guys Jonathan Rose owner masters in trading

4 comments

  1. Jonathan it looks like the 2000 open interest on July 19 calls was initiated on 5/21/19 the second day the options were available and stock price was @ 24.37. Does this change your perspective?

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