How to detect options trades showing big price gains

Introduction

This tutorial will guide you through the process of detecting options trades that show significant price gains. By screening for options block trades, traders can find actionable trade ideas based on volume and price action. This method is particularly useful for identifying potential opportunities in the market.

Step 1: Access the Options Block Trade Screener

1. Navigate to the MarketChameleon Options Trade Screener at marketchameleon.com/Screeners/OptionTrades.
2. Familiarize yourself with the interface and available filters.

Step 2: Set Up Your Screening Criteria

1. Select for Large Volume: Start by filtering for options trades with high volume. This indicates significant market interest.
2. Adjust Time Frame: Look for trades that have occurred within the current trading day to capture recent activity.
3. Focus on Price Gains: Identify trades that show notable price increases. You can set specific percentage gain thresholds to refine your search.

Step 3: Analyze the Results

1. Review Block Trades: Examine each trade listed in your results for block trades that meet your criteria.
2. Check Price Action: Look for patterns in the price movement of the underlying asset associated with these trades.
3. Look for Unusual Activity: Identify any trades that stand out due to their size or unusual volume compared to historical averages.

Step 4: Validate Your Findings

1. Cross-Reference Data: Compare your findings with other market indicators or news that might explain the price movement.
2. Consider Market Conditions: Take into account current market trends or events that could influence the price gains of the options.

Step 5: Make Informed Decisions

1. Formulate a Trading Strategy: Decide whether to enter or exit trades based on the information gathered.
2. Implement Risk Management: Always consider the risks involved in trading options and set stop-loss orders where appropriate.

Conclusion

By following these steps, you can effectively detect options trades showing big price gains, helping you to identify potential trading opportunities. Remember to conduct thorough analysis and maintain a cautious approach, as options trading carries inherent risks. Consider developing a regular screening routine to stay updated on market movements and trends.