Trending...
- Richline Transportation Expands Luxury Airport Transfer and Black Car Service in San Diego
- California: Crime is down in San Francisco, key law enforcement partnerships yield successful results
- California: Governor Newsom signs SB 41 to lower the cost of prescription drugs
SAN FRANCISCO - Californer -- Large in the money call options on Roblox's stock are due to expire at the end of the month. In the money stock options offer traders a leveraged way to gain exposure to the underlying stock. They are frequently referred to as stock replacement trades because they require less capital to put on, but they present directional risk just as if you owned the underlying equity directly. These traders are betting over $13 million that the stock price of Docusign will at least be $120 by the end of the month.
View the latest unusual options activity for Roblox (RBLX) stock
Why are options such an important indicator for future stock price movements?
Options have traditionally been thought of as a hedge instrument, but because of the amount of leverage they have, they are also used by large institutional buyers to capitalize on large upcoming stock movements.
More on The Californer
What is unusual option activity?
Each day, there are millions of options trades. However, not all trades are made equal. Certain trades contain more information than others. Unusual option trades are one example.
Unusual options activity is defined as a single trade that is bought on the ask or sold on the bid, with unusual volume and/or trade size compared to the open interest for that particular strike and expiry. This means that these are new contracts being traded, expressing a fresh opinion on the underlying stock.
Why is this interesting? Well given a large enough trade and it being bought on the ask or sold on the bid it shows extreme urgency on the trader's side.
For example, let's look at a trade of 5,000 calls which had a bid and ask spread of $3.00 by $3.70 respectively, and the order was executed on the ask at $3.70.
More on The Californer
What does that tell us?
The trader bought 5,000 call contracts, dropping $1.8M on the trade. Now, if they were patient and waited to fill the order in the middle of the bid and ask spread, say $3.35, they could have saved potentially $175K, but they didn't. To me, that says they have high expectations for this trade, and saving $175K is chump change.
This paired with the unusual high daily volume and size of the trade makes this type of trade very interesting, carrying a signal that there is a likelihood of a potential large move in the underlying stock. Unusually large purchases of options contracts indicate that someone thinks there is an impending event that will move a stock in a big way.
Optionsonar makes it very easy to stay in the loop on the latest unusual options activity by using a proprietary algorithm that was once only available to institutional traders on Wall Street.
View the latest unusual options activity for Roblox (RBLX) stock
Why are options such an important indicator for future stock price movements?
Options have traditionally been thought of as a hedge instrument, but because of the amount of leverage they have, they are also used by large institutional buyers to capitalize on large upcoming stock movements.
More on The Californer
- Multi-Signature Cold Storage: Keyanb Introduces Institutional-Grade Asset Protection for Chilean Crypto Traders
- NKSCX Introduces Zero-Knowledge Proof of Solvency for U.S. Traders Amid $6.5 Billion Fraud Crisis
- New Oasis International Foundation Announces Strategic Partnership Network Across 15 Countries to Advance Community-Led Economic Development
- Adiom Dsync Now Available in the Microsoft Azure Marketplace
- A Gift for You: Music, Story, and Hope for America: Free Download of The Human Renaissance Album
What is unusual option activity?
Each day, there are millions of options trades. However, not all trades are made equal. Certain trades contain more information than others. Unusual option trades are one example.
Unusual options activity is defined as a single trade that is bought on the ask or sold on the bid, with unusual volume and/or trade size compared to the open interest for that particular strike and expiry. This means that these are new contracts being traded, expressing a fresh opinion on the underlying stock.
Why is this interesting? Well given a large enough trade and it being bought on the ask or sold on the bid it shows extreme urgency on the trader's side.
For example, let's look at a trade of 5,000 calls which had a bid and ask spread of $3.00 by $3.70 respectively, and the order was executed on the ask at $3.70.
More on The Californer
- Linus Pauling, A great Scientist on Importance of Vitamin C, Dr.Abhay Kumar Pati, Hayward, C A USA
- Kiwanis Club of San Ramon Valley Teams With NBC Bay Area, Safeway for Annual Food Drive
- New You Smile Dental Implant Center Expands Office
- $8 Billion High-Margin National Gentlemen's Club Market Targeted by Acquisition Strategy Incorporating the Successful Peppermint Hippo™ Brand: $TRWD
- Why Indian Game Development Companies Are Shaping the Future of Global Gaming
What does that tell us?
The trader bought 5,000 call contracts, dropping $1.8M on the trade. Now, if they were patient and waited to fill the order in the middle of the bid and ask spread, say $3.35, they could have saved potentially $175K, but they didn't. To me, that says they have high expectations for this trade, and saving $175K is chump change.
This paired with the unusual high daily volume and size of the trade makes this type of trade very interesting, carrying a signal that there is a likelihood of a potential large move in the underlying stock. Unusually large purchases of options contracts indicate that someone thinks there is an impending event that will move a stock in a big way.
Optionsonar makes it very easy to stay in the loop on the latest unusual options activity by using a proprietary algorithm that was once only available to institutional traders on Wall Street.
Source: Optionsonar
Filed Under: Technology, Financial
0 Comments
Latest on The Californer
- DALPS Announces Global Airdrop to Reward Users and Expand Its Offers Marketplace
- Governor Newsom expands response arsenal with new emergency services facility in Southern California
- ALYXX Features on Oceans In Silhouette "Under My Skin" Single
- $150 Million Financing Initiates N A S D A Q's First Tether Gold Treasury Combining the Stability of Physical Gold with Blockchain $AURE
- DALPS Launches Marketplace Allowing Businesses to Trade Offers Like Stocks
- California: Governor Newsom announces affordable CalRx® insulin, $11 a pen, will soon be available for purchase
- Cardirun Foldable Treadmill for Home and Office, 10% Incline, 320 LBS Weight Capacity
- Podcast for Midlife Women Entrepreneurs Celebrates 100th Episode with Rhea Lana's Founder and CEO
- What If Help Could Come Before the Fall?
- California: TOMORROW: Governor Newsom to make major announcement on lowering drug costs
- Long Beach Recognizes National Childhood Lead Poisoning Prevention Week 2025
- OddsTrader Examines the NHL Presidents Trophy Curse: Why Regular-Season Success Rarely Leads to Playoff Glory
- Bookmakers Review Launches Betting Insights on NBC's "The Voice: Battle of Champions"
- Federal reductions to critical services threaten public safety as flood season gets underway in California
- California steps up to help military, veteran families while the federal government is AWOL
- MyNamePlayer Helps End "Name Shaming"
- California: YIMBYs rejoice! Leaders celebrate Governor Newsom's landmark actions this year to boost housing and affordability
- Long Beach Veterans Day Celebration Returns November 8 in Houghton Park
- Marisela, "La Dama de Hierro," Graces the Cover of RYM Magazine's October Issue
- California: Governor Newsom calls for congressional investigation into vile, antisemitic and violent messages from MAGA organization