Trade Aptitude

Results of Tuesday’s Best S&P Futures Turning Points: Neither trade triggered. 

Today’s Best S&P Futures Turning Points (consider wider stops and less size in fast moving markets): 

Buy 4521.00 stop 4517.00. Short 4598.50 stop 4604.25. 

The World Index: (+100/-100) rises from -29 to -14 with Asia Bearish and the west Bullish. 

Catalysts: GDP @ 8:30. Crude Oil Inventories @ 10:30. Beige Book @ 14:00. 

Quick Tip: UOA

Unusual Options Activity (UOA) is a great leading indicator of price. There are different ways to interpret exactly what qualifies an option to be “unusual” and how to utilize them in your trade selection. 

The foundation is an extreme volume spike relative to small open interest (existing contracts not yet closed out). 

Technical analysts generally agree that volume leads price, so this basis makes sense. If a stock is trading at $30 and massive volume occurs today in the $40 call options you could infer that some large traders might know something!

You probably have plenty of questions needing answers before you accept this concept. 

Do these large options trades have predictive power of future stock returns?

How much is significant volume and/or open interest? 

Who are the traders? 

What are the reasons this occurs? 

What’s the best strike price, ATM, ITM, or OTM? 

What about the expiration date? 

Does it work as well for Calls and Puts?

Here’s the good news… there is definitive research over thousands of trades that answers these questions. Click here for free access to our latest training session. 

Of course, knowing the answers doesn’t solve the problem of finding the Unusual Options Activity among millions of options traded daily! But you’ll learn how to do that in this training session as well. 

Trade Fearlessly,

Mike Siewruk