![]() Options are "bullish" when a call is purchased at/near ask price or a put is sold at/near bid price. ![]() ![]() Buyers and sellers try to take advantage of a large profit margin in these instances because they are expecting the value of the underlying asset to change dramatically in the future. "Out of the money" occurs when the underlying price is under the strike price on a call option, or above the strike price on a put option. "Out of the money" contracts are unusual because they are purchased with a strike price far from the underlying asset price. Time value is important to consider because it represents the difference between the strike price and the value of the underlying asset. Usually, additional time until a contract expires allows more opportunity for it to reach its strike price and grow its time value. A contract cannot be considered closed until there exists both a buyer and seller for it.Īnother sign of unusual activity is the trading of a contract with an expiration date in the distant future. The number of contracts that have been traded, but not yet closed by either counterparty, is called open interest. Volume refers to the total number of contracts traded over a given time period when discussing options market activity. Three Indications Of Unusual Options ActivityĮxtraordinarily large volume (compared to historical averages) is one indication of unusual options market activity. The stock price moved up to $37.97 following the option alert. AMC Entertainment AMC shares experienced unusual options activity on Friday.
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