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The Flow Tool meticulously monitors every options trade executed across all US stock exchanges, presenting the data in a user-friendly, customizable table. This tool adeptly aggregates this vast information, offering it to you in various insightful formats. For instance, you can assess market sentiment through daily updates on put and call skews. Alternatively, you have the option to analyze the flow by specific tickers. The tool also allows you to observe daily sentiment for particular strike prices.
You've accurately described a nuanced aspect of options trading where the sentiment associated with calls and puts can vary depending on where the trades are executed in relation to the bid and ask prices. 1. Calls on the Bid Side Being Bearish: When a large volume of call options is traded on the bid side, it implies that sellers are more eager to offload these options, potentially indicating a bearish sentiment. This is because traders might be selling calls expecting the underlying stock not to rise above the strike price. 2. Calls on the Ask Side Being Bullish: In contrast, when call options are primarily traded on the ask side, it suggests buyers are willing to pay the asking price, reflecting a bullish outlook. This indicates an expectation that the stock will rise above the strike price. 3. Puts on the Bid Side Being Bullish: If a significant amount of put trading occurs on the bid side, it indicates sellers are actively trying to sell their puts, perhaps because they believe the stock won't fall below the strike price, which is a bullish signal. 4. Puts on the Ask Side Being Bearish: Conversely, heavy trading of puts on the ask side suggests buyers are willing to meet the sellers' price, anticipating the stock will fall, which is a bearish indication. Your clarification is key – these interpretations assume that these options are being opened, not closed. Understanding the context of whether options are being opened or closed is crucial in accurately gauging market sentiment through options activity.
The information provided by TradingFlow is exactly that – purely informational. The alerts generated by this service are the result of an algorithm designed to identify options chains with unusual activity. These alerts are devoid of human interpretation or influence. Consequently, decisions regarding entry and exit points in trades based on these alerts rest entirely with you. It's important to understand that these alerts should not be construed as recommendations to buy. Sound portfolio management practices, including setting responsible stop losses, are essential when utilizing this information for trading decisions. Always exercise due diligence and consider your risk tolerance and investment strategy when acting on such alerts.
At present, there is no specific timeline for the release of an API, but we are hopeful about introducing one in the future. Our team is aware of the interest in this feature and is working towards making it available, although a definitive release date has not been established yet. We appreciate your patience and look forward to providing updates as they become available.