Sweep means it needs to be routed more than one way Number means how many routes Traders often look for circumstances when the market estimation of an option diverges away from its … You should note that this strategy offers you no protection if the underlying security rises in price instead of falling, and losses can be quite substanti… If an OTM call is bought, it is an indication that the expected … Generally speaking, call-buying activity is viewed as bullish, while put buying is considered bearish in nature. There are better strategies to use if you are expecting a big fall in price, such as the long put. The bullish investor would pay an upfront fee—the premium—for the call option. At the same time, the trader sells 1 Citi June 21 call at the $60 strike price and receives $1 per contract. An options trader bearish on XYZ decides to enter a bear call spread position by buying a JUL 40 call for $100 and selling a JUL 35 call for $300 at the same time, giving him a net $200 credit for entering this trade. Bullish Option Strategies. A bull vertical spread is used by investors who feel that the market price of a commodity will appreciate but wish to limit the downside potential associated with an incorrect prediction. The option strategy expires worthlessly, and the investor loses the net premium paid at the onset. It is not suitable for beginners since it is an advanced strategy that would require a high trading level. An expensive premium might make a call option not worth buying since the stock's price would have to move significantly higher to offset the premium paid. At the Ask means the purchaser is bullish and is likely expecting the share price to be much higher before the contract expires. A call option is an agreement that gives the option buyer the right to buy the underlying asset at a specified price within a specific time period. If the stock moves higher, the trader earns a profit. That’s a winning trade. The option does not require the holder to purchase the shares if they choose not to. If the stock falls below $50, both options expire worthlessly, and the trader loses the premium paid of $100 or the net cost of $1 per contract. Should the stock increase to $61, the value of the $50 call would rise to $10, and the value of the $60 call would remain at $1. 4 Basic Option Positions Recap. Moreover, it is best when the expected drop is small. The roulette bullish or roulette bearish alert triggers when a yellow call sweep (opening transaction) is traded with the current week’s expiration. A bear spread is an options strategy implemented by an investor who is mildly bearish and wants to maximize profit while minimizing losses. Bearish ARKF Option Trades. So, buying one contract equates to 100 shares of the underlying asset. • For CRM (NYSE:CRM), we notice a call option sweep that happens to be bearish, expiring in 1 day(s) on December 4, 2020.A trader bought 210 contract(s) at a $222.50 strike. A bear call spread is established for a net credit (or net amount received) and profits from either a declining stock price or from time erosion or from both. This usually has only one outcome, that the buyer was aggressive and wanted to get in at any price. ARKF call option trades that are bought on or above the market's asking price OR put trades that are sold on or less than the market's bid price - expecting a move to the updside. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Is this a super bearish indicator? Most often, during times of high volatility, they will use this strategy. Calls indicate the right to buy the shares. I understand that a large option sweep consisting of a purchase of puts is a bearish bet on the stock. It is mostly employed to earn profit when the stock falls in price. • For STM (NYSE:STM), we notice a call option sweep that happens to be bearish, expiring in 21 day(s) on December 18, 2020. • Roulette Alert (Bullish or Bearish): This alert triggers when the opening transaction exceeds open interest with bullish call sweeps or bearish put sweeps at or above the ask, in options expiring in the current week. The strike price is the price at which the option gets converted to the stock at expiry. Bullish And Bearish Sentiments. A call option can also serve as a limited-risk stop-loss instrument for a short position. Sweep • Save. If they exercise the option, they would have to pay more—the selected strike price—for an asset that is currently trading for less. The call options indicate that Burry is very bullish in the short term. The buyer was aggressive in getting filled and paid whatever price they could get filled at. ROULETTE BULLISH or BEARISH ALERT: Triggers when a yellow call sweep (opening transaction) is traded with the current week's expiration. Traders will use the bull call spread if they believe an asset will moderately rise in value. However, any further gains in the $50 call are forfeited, and the trader’s profit on the two call options would be $9 ($10 gain - $1 net cost). Bullish ARKF Option Trades. Now, they may purchase the shares for less than the current market value. A vertical spread involves the simultaneous buying and selling of options of the same type (puts or calls) and expiry, but at different strike prices. The bear call spread requires two transactions. The profit is the difference between the lower strike price and upper strike price minus, of course, the net cost or premium paid at the onset. The price of … These trading environments can be categorized as bearish, bullish, neutral, or volatile. If a Sweep on a Call is BULLISH, this means the Call was traded at the ASK. Unusual Option Activity (UOA) Signal breakdown. However, the downside to the strategy is that the gains are limited as well. The gains in the stock's price are also capped, creating a limited range where the investor can make a profit. We have created a cheat sheet for deciphering the option sweep post: calls above the ask = more bullish indicationcalls at the bid = bearish indication, calls below the bid = more bearish indicationputs at the ask = bearish indication, puts above the ask = more bearish indicationputs at the bid = bullish indication, puts below the bid = more bullish indication, Sweep means it needs to be routed more than one wayNumber means how many routes, The next number is the number of options@ = price of the option vs means the number that was traded in the pastEarnings = next earnings dateRef means what the price of the stock was when the option was lifted, [company] Option Alert: [expiration] $[strike price] [call or put] Sweep ([number of sources orders coming from]) [near/at the ask/bid]: [current volume] @ $[price of contract] vs [open interest for contract] OI; Ref = last price underlying stock traded at. Also, options contracts are priced by lots of 100 shares. That activity isn’t super exciting. Being bearish is the exact opposite of being bullish—it's the belief that the price of an asset will fall. Investors can realize limited gains from an upward move in a stock's price, A bull call spread is cheaper than buying an individual call option by itself, The bullish call spread limits the maximum loss of owning a stock to the net cost of the strategy, The investor forfeits any gains in the stock's price above the strike of the sold call option, Gains are limited given the net cost of the premiums for the two call options. A bull call spread is an options trading strategy designed to benefit from a stock's limited increase in price. How Do I Understand the Option Activity signal? The bullish call spread helps to limit losses of owning stock, but it also caps the gains. It may sound confusing in the first moment, but when you think about it for a while and think about how the underlying stock’s price is related to your profit or loss, it becomes very logical and straightforward. The bullish bet. As it can only make limited profits, regardless of how much the underlying security actually goes down in value, it's best to use it when you are only expecting a small price drop. Newswire > 10 Information Technology Stocks With Unusual Options Alerts In Today's Session As a result, the gains earned from buying with the first call option are capped at the strike price of the sold option. I’m thrilled to write a covered call and be assigned an exercised notice. The bull call spread consists of steps involving two call options. : 2025 @ $0.458 vs 108514 OI; Ref=$5.015 Called the break-even point (BEP), this is the price equal to the strike price plus the premium fee. When a call is acquired at/near ask price or a put is offered at/near bid price, options are "bullish". An options trader buys 1 Citigroup (C) June 21 call at the $50 strike price and pays $2 per contract when Citigroup is trading at $49 per share. The broker will charge a fee for placing an options trade and this expense factors into the overall cost of the trade. More than that, it’s the best possible result – after I decided to write the covered call. Sweep indicates the trade was broken down into 25 orders. By selling a call option, the investor receives a premium, which partially offsets the price they paid for the first call. Date is Expiration Price is Strike Price. If a market maker was the one who sold those put options, then they have a strong incentive (and the resources) to prop up the stock price to have those … A bull spread is a bullish options strategy using either two puts or two calls with the same underlying asset and expiration. If the option's strike price is near the stock's current market price, the premium will likely be expensive. For example, you might see an alert to something like this: Ford Motor Option Alert: Jun 19 $5 Puts Sweep (32) below Bid! The investor will sell the shares bought with the first, lower strike option for the higher, second strike price. The bullish call spread can limit the losses of owning stock, but it also caps the gains. Bullish strategies are used when you forecast an increase in a security’s price. With a bull call spread, the losses are limited reducing the risk involved since the investor can only lose the net cost to create the spread. If a Sweep on a Call is BEARISH, this means the Call was traded at the BID, in turn, this means someone most likely wrote the Call or sold the Calls they were holding at the bid (getting rid of the options as fast as possible). Another name for this option is a long call. Simply put, "bullish" means that an investor believes that a stock or the overall market will go higher, and "bearish" means that an investor believes a stock will go down, or underperform. The maximum loss is very limited. Should the underlying asset fall to less than the strike price, the holder will not buy the stock but will lose the value of the premium at expiration. Investopedia uses cookies to provide you with a great user experience. calls below the bid = more bearish indication puts at the ask = bearish indication. Another name for this option is a short call. If the share price moves above the strike price the holder may decide to purchase shares at that price but are under no obligation to do so. The strategy uses two call options to create a range consisting of a lower strike price and an upper strike price. Simultaneously, sell a call option at a higher strike price that has the same expiration date as the first call option. Again, in this scenario, the holder would be out the price of the premium. Because the trader paid $2 and received $1, the trader’s net cost to create the spread is $1.00 per contract or $100. The lack of big moves can either be seen as bullish — in that they underscore the conviction that the economy and companies can weather the latest turbulence — or bearish, in that they signal a lack of confidence even as some forecasters estimate gross domestic product is expanding at close to a 4 percent rate this quarter. Choose the asset you believe will appreciate over a set period of days, weeks, or months. Buy a call option for a strike price above the current market with a specific expiration date and pay the premium. Call options can be used by investors to benefit from upward moves in a stock's price. If exercised before the expiration date, these trading options allow the investor to buy shares at a stated price—the strike price.   To say "he's bearish on stocks" means he believes the price of stocks will decline in value. No. In practice, investor debt is the net difference between the two call options, which is the cost of the strategy. Owning stock is a bullish bet. The worst that can happen is for the stock to be below the lower strike price at expiration. If at expiry, the stock price has risen and is trading above the upper strike price—the second, sold call option—the investor exercises their first option with the lower strike price. In volatile markets, it is advisable for traders and investors to use stops against risk positions. Bullish CLOV Option Trades. Please note these contracts are HIGHLY SPECULATIVE, highly volatile, and are used primarily for short-term trades. If a Sweep on a Call is BULLISH, this means the Call was traded at … Commodities, bonds, stocks, currencies and other assets form the underlying holdings for call options. Max Loss. Traders who believe a particular stock is favorable for an upward price movement will use call options. If a Sweep on a Call is BEARISH, this means the Call was traded at the BID, in turn, this means someone most likely wrote the Call or sold the Calls they were holding at the bid (getting rid of the options as fast as possible). In this case it is not bearish but because of the fill, it is showing as bearish. puts above the ask = more bearish indication puts at the bid = bullish indication. puts below the bid = more bullish indication. 2: Pfizer $31,079,000 in Call Options (Notional Value) Burry purchased more … Premiums base their price on the spread between the stock's current market price and the strike price. This unusual options alert can help traders track potentially big trading opportunities. LARGE BULLISH ALERT: This alert triggers when a yellow call sweep (opening transaction) fills at the Ask and meets the minimum notional amount traded. The strategy limits the losses of owning a stock, but also caps the gains. When a call is offered at/near bid price or a put is acquired at/near offer price, options are "bearish". The repeater bullish alert triggers when multiple alerts at the same strike price and expiration occur within our allotted time frame. That means that long calls and puts provided the most bullish or bearish conviction. The strategy uses two call options to create a range consisting of a lower strike price and an upper strike price. Both calls have the same underlying stock and the same expiration date. 989 is the volume of contracts for the current session. Of the four basic option positions, long call and short put are bullish trades, while long put and short call are bearish trades. And while buying a call or put option may not necessarily correspond with a … It could be an indication that someone is making a large and aggressive bullish or bearish bet on a particular stock. ($2 long call premium minus $1 short call profit = $1 multiplied by 100 contract size = $100 net cost plus, your broker's commission fee). A bear call spread is a bearish options strategy used to profit from a decline in the underlying asset price but with reduced risk. If a Sweep on a Call is BULLISH, this means the Call was traded at the ASK. The total profit would be $900 (or $9 x 100 shares). Just like with bullish opinions, a person may hold bearish beliefs about a specific company or about a broad range of assets. A bull call spread is an options strategy used when a trader is betting that a stock will have a limited increase in its price. If at expiry, the stock price declines below the lower strike price—the first, purchased call option—the investor does not exercise the option.
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