While options trading volume and open interest stats are readily available from multiple sources, the nature of options trades remains an obscure mystery. I realize that there are two sides to every trade, but a valuable indicator would be to see the volume of trades going off at the Ask vs the Bid. A trade at the Ask would indicate Put or Call buying while a trade at the Bid would indicate Put or Call selling. Matching these metrics up with changes in implied volatility would be a powerful trading tool, in my opinion. Does anyone know of such a service, paid or otherwise that tracks this information?
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Tracking Option Trades
- Thread starter wjexchange
- Start date
Quote from wjexchange:
While options trading volume and open interest stats are readily available from multiple sources, the nature of options trades remains an obscure mystery. I realize that there are two sides to every trade, but a valuable indicator would be to see the volume of trades going off at the Ask vs the Bid. A trade at the Ask would indicate Put or Call buying while a trade at the Bid would indicate Put or Call selling. Matching these metrics up with changes in implied volatility would be a powerful trading tool, in my opinion. Does anyone know of such a service, paid or otherwise that tracks this information?
NSS. Stick to stocks, forex or futures then.
Quote from RPEX:
Are you a ringer for LiveVol? Boy Marketing has got desperate.
I'm not sure what you mean by the above and I have no idea what LiveVol is? I thought I simply posted a reasonable and logical question to better help me understand the relationship between options trading and how that activity might affect the underlying. I am a private investor with ties to no one. wj
Quote from wjexchange:
I'm not sure what you mean by the above and I have no idea what LiveVol is? I thought I simply posted a reasonable and logical question to better help me understand the relationship between options trading and how that activity might affect the underlying. I am a private investor with ties to no one. wj
oh, LiveVol is basically what you are looking for. It charts vol and skew in real time and estimates the volume metrics you were after - like bought/sold at the bid/ask for puts/calls. I don't know if there are other services that do that.
cheers
Quote from wjexchange:
I'm not sure what you mean by the above and I have no idea what LiveVol is? I thought I simply posted a reasonable and logical question to better help me understand the relationship between options trading and how that activity might affect the underlying. I am a private investor with ties to no one. wj
Your post read like a beautiful teaser ad - any more blatant and Baron would be charging you advertising fees.
If you really think "the nature of options trades remains an obscure mystery" as per your first post, perhaps your time might be better spent reading more about options, rather than trying to figure out how to trade them.
The market will still be there when you are ready.
Thanks RPEX for your thoughtful reply. I will check out LiveVol.
As to the remarks to my original post from justrading, I am flattered that you think my words were so articulate. I am neither a shill or ringer for anybody, just a private investor trying to broaden my knowledge. BTW, I have been trading options for nearly 30 years, mostly just covered calls and selling cash secured puts. The "obscurity" that I was relating to was that option volume, open interest, and implied volatility do not tell the whole story. For example, if a large"Call block went off at the ask, that would be a potential sign that some smart money expects the underlying price to rise. If it went off at the bid, then that would indicate a call seller betting on a decline or just someone doing a buy/write.
I just joined this forum hoping for insightful dialog but it appears it is no better than Yahoo!.
As to the remarks to my original post from justrading, I am flattered that you think my words were so articulate. I am neither a shill or ringer for anybody, just a private investor trying to broaden my knowledge. BTW, I have been trading options for nearly 30 years, mostly just covered calls and selling cash secured puts. The "obscurity" that I was relating to was that option volume, open interest, and implied volatility do not tell the whole story. For example, if a large"Call block went off at the ask, that would be a potential sign that some smart money expects the underlying price to rise. If it went off at the bid, then that would indicate a call seller betting on a decline or just someone doing a buy/write.
I just joined this forum hoping for insightful dialog but it appears it is no better than Yahoo!.
Quote from wjexchange:
Thanks RPEX for your thoughtful reply. I will check out LiveVol.
The "obscurity" that I was relating to was that option volume, open interest, and implied volatility do not tell the whole story. For example, if a large"Call block went off at the ask, that would be a potential sign that some smart money expects the underlying price to rise. If it went off at the bid, then that would indicate a call seller betting on a decline or just someone doing a buy/write.
No worries, i see where you are coming from, but i would be sceptical of reading too much into it. I suppose when you aggregate all of the options trades and look at how aggressive they are vs the average to see if there is unusual activity, and from what i remember LiveVol shows you that in the stats tab.
Quite a few exchanges publish their block trades, but i think the flexibility of option positions prevents reading too much into it. Could be a vol trade, could be a make-up between two MMs, or a part of a dividend trade between two MMs, or the position could be modifying an existing book, etc
Quote from wjexchange:
For example, if a large"Call block went off at the ask, that would be a potential sign that some smart money expects the underlying price to rise. If it went off at the bid, then that would indicate a call seller betting on a decline or just someone doing a buy/write.
IOW order flow, perhaps like Market Delta in directional trading of underlying instruments.
I took a look at it for ES, can't say I was impressed but that does not mean it doesn't work. Some people swear by it.
RPEX and JusTrading, thanks for your replies and advice. Market Delta, although appearing to have a steep learning curve, seems to address my question.
From the Market Delta blog:
"Traditionally, the Delta Divergence signals use Ask and Bid volume to measure the sentiment of market-priced trades."
From the Market Delta blog:
"Traditionally, the Delta Divergence signals use Ask and Bid volume to measure the sentiment of market-priced trades."