. Early in today’s trading session a trader bought 1,215 IMAX Feb 27 calls for $0.90 and sold 1,215 IMAX Mar 23 puts for $0.20. Volume on the Feb 27 call line has now reached 3,200 contracts and will add to open interest of 1,711 on that line. This also adds to the persistent call buying we have seen over the past week. Although the chart of IMAX is relatively weak we believe that all of this bullish order flow is a signal to get long IMAX. We will remain long through earnings on the 20th.
Comments
timwest
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What also can be the situation is that someone decided to hedge a short position of 121,500 shares.
KeeneOnMarket
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We are able to tell what price they traded at. If you then also know what the bid-ask spread was at the time of the trade we can determine if the options were bought or sold. This requires access to a data feed that your platform likely does not have.
paulyberndt
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the option market has about a $2.14 move priced into earnings up or down.
paulyberndt
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I am curious how you determined whether they were buying or selling the calls or puts? Just because they have positions at the strike price one does not know what the trade is that was put on. At least that is what I was taught. Thanks
ChrisMoody
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paulyberndt...Since Andrew is constantly reading the order flow, as a person who haas taken his courses I will offer an explanation. If Andrew disagrees or wants to add I'm sure he will correct me. First...great question...In Andrews course he goes in to extensively that just b/c someone is buying, or selling, it isn't necessarily bullish or bearish, b/c they could be hedging a position. Andrew has an Institutional Grade feed that deciphers through years of experience several things. The two most notable when a large buyer places orders through several brokers, they have a proprietary way of figuring this out and placing a high probability of certainty that it is one major buyer. They also keep track of all the options activity and stock buying/selling and decipher if there is a hedge or a direction play.
That doesn't answer your question precisely, however, I think anyone who consistently follows Andrew will see quickly his accuracy is pretty high.
My favorite posts are when he says someone just came in and bought or sold 10 times the average daily volume of options totaling a 10 million dollar bet on the direction. Insider trading is illegal of course. But if a trader makes a 10 Million dollar bet...AND that 10 million dollar bet = 10 times the average daily option volume (so we're not talking about a stock where a 10 million dollar bet is 5% of the average daily options volume on that stock). I personally come to 2 conclusions, #1 a person who can make a 10 million dollar bet Most Likely didn't get to the point where they could place a 10 million dollar bet without being a good trader, And if they are willing to make a bet that large in comparison to the average daily volume activity of that stock...then they may know something.
My favorite is when Andrew posts that a trader just came in and bought a position that Exceeds ALL of the current OPEN INTEREST COMBINED on that stock. Do you think they may know something???
Just my thoughts
timwest
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I like to know about major options positions that trade, particularly when they come from "out of the blue". At least it gives us a heads up to look at a chart and see what news is around the corner. Thanks for posting.