Looking at option volume as indicator?

Discussion in 'Stocks' started by Cuddles, Feb 19, 2017.

  1. just21

    just21

  2. sle

    sle

    Let's say you see a blob of open interest - it has to be an option where gamma is a meaningful fraction of ADV. Also, you need to know which side will be a delta hedger. If you have both bits of information, you can assume statistical preference for mean reversion (in case of delta hedger being long gamma) or trending (in case of delta hedger being short gamma). A good real life example is, for example, a structured buyback - if you know of one, you wanna be fading every larger move
     
    #32     Feb 25, 2017