The one option flow I would actually pay attention to
Yesterday I sent the Jason Ruschel interview. This is a specific piece of it worth pulling out on its own.
Jason spent five years reading institutional option flow professionally, so I asked him what he actually looks for in it. His answer was narrower than I expected.
Large opening put sales.
That's the whole filter. Everything else on the tape he'll glance at and move on.
The reasoning is about what the trade actually obligates you to do.
When somebody sells a put in size, they're accepting an obligation to buy that stock at that strike. That's a real commitment. A price, and somebody with the balance sheet to honour it. Very few flows on the tape carry that kind of weight.
The word opening is key.
You can tell a position is new rather than a roll or an unwind because there's little or no open interest at that strike. Volume higher than open interest is the simple check.
Then he scales it against the name.
A million-dollar trade in a mega cap is noise. It happens all day. The same premium in a biotech or a smaller commodity name is a different signal entirely. Twenty times the usual option volume in a quiet name is worth stopping for.
And the useful part afterwards is the level.
Somebody with size has told you where they're willing to own the stock, which often behaves like support if it gets down there. You now have a marked level on your chart with actual balance sheet behind it.
The rest of the flow tape is people expressing a hope. Large opening put sales are somebody putting real obligation on the table. That difference is the whole reason the signal carries.
Most of what shows up on a screen during a trading day is noise. The skill is knowing where the signal sits inside all of it, and having the discipline to only stop for the handful of things that carry information.
The masterclass is where I walk through how I filter for the handful of things that actually pay.
Free 60 minutes, linked below.
Watch my free masterclass (exclusive for serious option traders)
If you want to skip the masterclass and jump straight into our course, the Options Insight Advantage, this is the link.
Imran
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