![]() ![]() Unusual options activity is significantly higher than average trading volume in an options contract. Each options contract has trading volume, which is measured as the number of contracts bought and sold in a single trading day. For a put option to make a profit, a stock’s price must be lower than the strike price before expiration.Ī unique options contract is defined by its underlying stock, whether it is a call or put option, its expiration date, and its strike price. For a call option to make a profit, a stock’s price must be higher than the strike price before expiration. It’s not the same as the breakeven price for an options trade, but it does play a role in determining whether an options trade is profitable. The strike price is important because it represents the price at which an option contract can be exercised. So, if a trader or institution wants to speculate on a price movement in a stock using options, they also have to decide when they think that price movement will occur. The expiration date is important because an options contract is worthless after that date. Stock options can be bullish (call options) or bearish (put options), and every option has an expiration date and strike price. In order to understand unusual options activity, it’s important to know a little about the options market. In our guide to unusual options activity, we’ll explain what it is, why it’s important, and how you can track and generate trading ideas off of it. Keeping an eye on unusual options activity can help you generate trade ideas and stay one step ahead of the market. ![]() ![]() This type of activity is often due to institutional investors and it can be a signal that smart money thinks the price of a stock will move soon. Unusual options activity occurs when trading volume in an options contract is high above its average. ![]()
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