Options Flow Glossary
Plain-English definitions of the 23 terms you'll see when reading unusual options activity and options flow.
Jump to: Unusual options activity · Options flow · Open interest · Volume · Volume/OI ratio · Premium · Call option · Put option · Strike price · Expiration date · 0DTE · In / out of the money · Bid, ask and spread · At or above the ask · Sweep · Block trade · Opening vs. closing trade · Hedge · Spread · Implied volatility · Delta · Dark pool · Options Clearing Corporation
- Unusual options activity (UOA)
- An options trade much larger than normal for its contract, usually with same-day volume above open interest and a large premium. See the full guide.
- Options flow
- The stream of options trades as they print, often filtered to large or aggressive orders. Traders watch flow to see where big money is positioning.
- Open interest (OI)
- The number of option contracts that are open, meaning not yet closed, exercised, or expired. Published once a day by the Options Clearing Corporation.
- Volume
- The number of option contracts traded in the current session. Resets to zero each day.
- Volume/OI ratio
- Today's volume divided by the morning's open interest. Above 1x means today's trading can't all be closing trades. See volume vs. open interest.
- The price of an option. Total premium is price per contract × 100 shares × number of contracts: the dollars actually spent on a trade.
- Call option
- A contract giving the buyer the right to buy 100 shares at the strike price before expiration. Buying calls is a bullish position.
- Put option
- A contract giving the buyer the right to sell 100 shares at the strike price before expiration. Buying puts is a bearish position or a hedge.
- Strike price
- The price at which an option can be exercised.
- Expiration date
- The last day an option can be exercised. Days to expiration (DTE) hints at the trader's timeframe.
- 0DTE
- Options that expire the same day they're traded. Common in SPX, SPY and QQQ. Very high risk and very sensitive to small moves.
- In / out of the money (ITM / OTM)
- A call is in the money when the stock is above the strike; a put when it's below. Out-of-the-money options are cheaper and more speculative.
- Bid, ask and spread
- The bid is the highest price buyers will pay; the ask is the lowest sellers will accept. The spread is the gap between them.
- At or above the ask
- A trade filled at the seller's asking price or higher. It signals an aggressive, urgent buyer, the basis for bullish and bearish tags.
- Sweep
- A large order split and routed across several exchanges at once to fill as fast as possible. Sweeps signal urgency.
- Block trade
- A single large print, often negotiated privately and then reported to an exchange. Blocks signal size but not necessarily urgency.
- Opening vs. closing trade
- An opening trade creates a new position; a closing trade exits one. You can't tell which from the tape alone. Check next-day open interest.
- Hedge
- A position that offsets risk in another. Funds commonly buy puts to protect stock they own, which can look like bearish flow.
- Spread (multi-leg) order
- Two or more options traded together, such as buying one strike and selling another. Individual legs can look like unusual activity on their own.
- Implied volatility (IV)
- The market's expected future volatility, backed out of option prices. Big buying often lifts IV; IV usually drops after earnings (IV crush).
- Delta
- How much an option's price moves for a $1 move in the stock, roughly the probability it expires in the money.
- Dark pool
- A private venue for trading stocks. Options do not trade in dark pools; "dark pool options flow" is a misnomer for large options blocks.
- Options Clearing Corporation (OCC)
- The central clearinghouse for U.S. listed options. It guarantees trades and publishes daily open interest.