Shares of Intel (NASDAQ: INTC) saw some unusual options activity on Monday. Following the unusual option alert, the stock price moved down to $50.05.
- Sentiment: BULLISH
- Option Type: TRADE
- Trade Type: PUT
- Expiration Date: 2020-10-16
- Strike Price: $50.00
- Volume: 4065
- Open Interest: 10795
3 Signs of Unusual Options Activity
Extraordinarily large volume is one indication of unusual options activity. Volume refers to the total shares contracts traded in a day when discussing options activity. Open interest describes unsettled contracts that have been traded but not closed by a counter-party. In other words, for each contract buyer, there must be a seller. A purchased contract remains open until a seller closes it, and vice versa.
Another gauge of unusual option activity is a contract with an expiration date in the distant future. Additional time until a contract expires generally increases the potential for it to grow its time value and reach its strike price. It is important to consider time value because it represents the difference between the strike price and the value of the underlying asset.
Contracts that are “out of the money” are also indicative of unusual option activity. “Out of the money” contracts occur when the underlying price is under the strike price on a call option, or above the strike price on a put option. These trades are made with the expectation that the value of the underlying asset is going to change dramatically in the future, and buyers and sellers will benefit from a greater profit margin.
Understanding Sentiment
- Options are “bullish” when a call is purchased at/near ask price or a put is sold at/near bid price
- Options are “bearish” when a call is sold at/near bid price or a put is bought at/near ask price
Although the activity is suggestive of these strategies, these observations are made without knowing the investor’s true intentions when purchasing these options contracts. An observer cannot be sure if the bettor is playing the contract outright or if they’re hedging a large underlying position in a common stock. For the latter case, the exposure a large investor has on their short position in common stock may be more meaningful than bullish option activity.
Using These Strategies to Trade Options
Unusual options activity is an advantageous strategy that may greatly reward an investor if they are highly skilled, but for the less experienced trader, it should remain as another tool to make an educated investment decision while taking other observations into account.
For more information to understand options alerts, visit https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts
© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
"activity" - Google News
July 27, 2020 at 10:38PM
https://ift.tt/2CIwmgj
Understanding Intel's Unusual Options Activity - Benzinga
"activity" - Google News
https://ift.tt/3ddCXMh
https://ift.tt/2WkO13c
Bagikan Berita Ini
ReplyDeletedewa kemenangan hanya ada di dewalotto dengan peluang menang dan beragam jenis permainan mendorong anda supaya bisa memainkan permainan kami
yuk silahkan kunjungin ya hnya di dewalotto :)
ADD WA +855 888765575 Terima Kasih admint...:)
Modal 20rb menang ratusan hingga jutaan?
ReplyDeleteDisini tempatnya IONQQ (p0k3r-0nlin3)
Sedia deposit pulsa juga (min 25rb)