If there's a buyer,...

Arnie Guitar

Arnie Guitar

...there's a seller.

This morning one of the talking heads on tv noted the huge increase in Call Option volume, how it meant that Joe retail thinks the market is going up.

Is there data that separates sell orders placed vs buy orders placed?

Otherwise, the seller is just as convinced the underlying is going down as the buyers is convinced it's going up.

BFD.

I must be missing something.
 
There's your problem is talking Heads are noise. The market is always based on disagreement and prices and no one really knows. Say someone wants to predict the future who makes the future so what happens in intervening time between the time the prediction is made and the time of the predictions occurrence someone trades something happens what would that something happening be and why would they do it you'll quickly find out that you'll find answers on both sides of the present level.

Depending on the data source sometimes that information is provided sometimes it's not sometimes a big companies use dark pools to avoid revealing that sort of information You're not going to find an easy answer on that one
 
Arnie Guitar said:
...there's a seller.

This morning one of the talking heads on tv noted the huge increase in Call Option volume, how it meant that Joe retail thinks the market is going up.

Is there data that separates sell orders placed vs buy orders placed?

Otherwise, the seller is just as convinced the underlying is going down as the buyers is convinced it's going up.

BFD.

I must be missing something.
More...
Maybe they are thinking that the market has a good possibility or going down. They are selling stock and buying calls so if they wrong they can participe with limited risk in a continued market upswing.
 
Arnie Guitar said:
the seller is just as convinced the underlying is going down as the buyers is convinced it's going up.
More...

The *seller* can be a market maker though which will have no opinion on which way the market is going. The market maker will hedge the short calls with the underlying stock/futures.

That being said, you can't know the real meaning of option buying unless you can see the entire portfolio of the trader doing the buying.
If someone is buying large numbers of calls, it could be a hedge against a large short position of the underlying which means the trader is actually bearish even though they're buying calls.
 
Arnie Guitar said:
...there's a seller.

This morning one of the talking heads on tv noted the huge increase in Call Option volume, how it meant that Joe retail thinks the market is going up.

Is there data that separates sell orders placed vs buy orders placed?

Otherwise, the seller is just as convinced the underlying is going down as the buyers is convinced it's going up.

BFD.

I must be missing something.
More...
Selling covered calls is quite common. They aren't betting against the buyer's prediction on a price increase, just the time frame it will take to actually get there. The longer it takes for the option to get into the money the more the of the option premium they can expect to keep on average.
 
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