Using flow data to make profit - Strategy in Testing (UPDATE)

C

Cleartarget

New member
@MasterSteve, I understood that, its difficult to explain the concept or strategy , as you stated "I don't think any one thing that we look for in a trade is complicated, but I don't want to confuse people when I put it all together." I have suggestion , Instead of explain in text. Can you make a quick video so this way we will get most of the concept in visual.
Yes, that was what i was thinking to said,better do a video and then we can study it all the steps to look at.
 
G

ganq

New member
2019 Donor
Hey guys, I’ve recently built a live options flow data website and I’m showing it off partially to get karma and mostly to prove that websites that charge $150+ shouldn’t exist. Please let me know your thoughts.

This tool shows where big money is making moves. It aggregates data from clearinghouses and various exchanges to showcase abnormal activity in the time and sales.

Split = a large order split into many small lots in an effort to stay under the radar
Block = a large order made in one lot

You’ll notice the ability to search by a specific ticker or to look at the daily overall flow. When the market is live this data will update live and if you’re seeing a lot of the same sentiment you’ll be able to understand where the money is being moved. Each transaction always contains both a buyer and seller, spreads will also show up in pairs to showcase both legs.
What happened to the website link?, I forgot the link and cannot seem to find it anywhere.
 
BenTen

BenTen

Administrative
Staff
VIP
@ganq That link is no longer showing free flow but requires people to sign up for the site so I took it out.
 
M

mini

New member
Does anyone has created the option flow indicator which can show unusual option activity? Or any beneficial system to trade options?
 
J

jposeyx2

New member
I use flow algo and CBOE, but mostly CBOE because it gives me greater control over what I look at.
@codydog
There definitely is a learning curve to figuring out whats going on. I'm still working on it myself. Another difficulty is being able to discern between the millions of plays happening every day, which ones will benefit you the most. I'll put out a post later this week discussing some of the strategies and barriers of entry to this method. I can't tell you that I know everything thats going on in the market. But there are thousands of stocks you can play on and a million opportunities to play. Just need to have the patience to wait for the right set up, and the risk management for in case you get it wrong.
Have you tried DataTraderPro or LivVol ? LivVol is expensive......
If you use the high volume plays that pop up on the scans, it shows the price they were bought/sold. Use that price as your base price. Within a day or so, if that stock moves .50 cents above the base then Buy.... .50 cents below the bade the Sell
 
J

jposeyx2

New member
Is this like checking TOS top sizzling stocks.. and look for unusual option volume. eg. EQT with 16434 at 15 NOV 9 PUTS @ $0.80

Set a new gadget on the left side and use Trade Flash....it’ll scroll all large unusual activity
 
J

jposeyx2

New member
The free scans or even the trading groups that have flow for $20-$60 a month usually only have PUT/SCAN attached to the flow, that's correct. While that does show one side of the trade, it doesn't show the full move. I prefer to see the actual trade on the trade tape so I can see more information.

For example, the FIS play today. At 10:27 am PST there was a 8,800 QTY FIS NOV 15, 2019 130 CALL @2.25 LMT order. But looking further at that particular play on a trade tape, you can see two things. First, that play is below the bid price (the maximum price that a buyer is willing to pay for the security), usually meaning that it was sold. Selling a load of calls looks like a downside or a taking profit play. But second, we can also see that it was part of a call spread. We come to that conclusion because of the second entry at the same time, 8,800 QTY FIS NOV 15, 2019 125 CALL @ 4.85 LMT order. That play was bought above the market spread, usually meaning a buy because it was bought above the current ask price (the minimum price the seller is willing to take for a security). With that information, it is fairly reasonable to assume that it is a bullish call spread play.
It is impossible to tell exactly what the idea behind the play it is because we can't read the buyer's mind or see what other positions he/she has made. But looking through the rest of the flow today, we can see that there is an unusual amount of calls for mid November and December. Looking at the flow in the past few days, we can also see a heavy amount of calls for the same time frame. This helps to confirm our bias for this flow, and we can start to think about adding this stock to our watchlist.

This is a short overview for the first thing I look at when looking at opening a position. The next step is to figure out where the big money is in that stock. After, I look at upcoming events that could affect my position and how volatile the stock looks to be in the short term future. Does that help?

Edit: 10/24/2019 12:18 PM PST Correction edits to further clarify the FIS play and correct the first play from at the ask to below the bid.
Don’t forget to pay attention to the current price of the underlying stock.....a move .50 either way after these big activity numbers will tell you the intended direction....
 
M

MasterSteve

Active member
VIP
Have you tried DataTraderPro or LivVol ? LivVol is expensive......
If you use the high volume plays that pop up on the scans, it shows the price they were bought/sold. Use that price as your base price. Within a day or so, if that stock moves .50 cents above the base then Buy.... .50 cents below the bade the Sell
I use LiveVol
 
H

hnmw

New member
@MBF I have been looking for this indicator for option volume everywhere for a few weeks but can't find it. Would you be it able to share it please? I know you said it is from WallStreet Jesus. I am happy if you were willing to share it here or alternatively send me a message. I don't mind if it is TOS or another platform. Thanks a lot
 
S

samks_30

New member
2019 Donor
@MBF I have been looking for this indicator for option volume everywhere for a few weeks but can't find it. Would you be it able to share it please? I know you said it is from WallStreet Jesus. I am happy if you were willing to share it here or alternatively send me a message. I don't mind if it is TOS or another platform. Thanks a lot
This is IBKR inbuilt indicator.
 
J

Jim Klopp

New member
The free scans or even the trading groups that have flow for $20-$60 a month usually only have PUT/SCAN attached to the flow, that's correct. While that does show one side of the trade, it doesn't show the full move. I prefer to see the actual trade on the trade tape so I can see more information.

For example, the FIS play today. At 10:27 am PST there was a 8,800 QTY FIS NOV 15, 2019 130 CALL @2.25 LMT order. But looking further at that particular play on a trade tape, you can see two things. First, that play is below the bid price (the maximum price that a buyer is willing to pay for the security), usually meaning that it was sold. Selling a load of calls looks like a downside or a taking profit play. But second, we can also see that it was part of a call spread. We come to that conclusion because of the second entry at the same time, 8,800 QTY FIS NOV 15, 2019 125 CALL @ 4.85 LMT order. That play was bought above the market spread, usually meaning a buy because it was bought above the current ask price (the minimum price the seller is willing to take for a security). With that information, it is fairly reasonable to assume that it is a bullish call spread play.
Steve, I've seen a couple of places where people mention bout at the ASK etc. Where can you get if ASK orBID?
Thanks,
Jim
 

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