What Is Unusual Options Activity?

Put simply, Unusual Options Activity (UOA) represents anomalies in the Options Order Flow (i.e. the 6M+ options contracts traded on a daily basis).

We call these anomalies Unusual Options Activity, and oftentimes, this unusual activity serves as a leading indicator ahead of a large movement in the underlying stock.

How to Identify Unusual Options Activity

There’s no single definition for Unusual Options Activity, but below are a few key characteristics that have proven to be indicative of large upcoming movements:

Single options contract with large volume compared to the average contract size

• In other words, a large concentration in a single contract

Large spike in options volume compared to the daily average

• Up to 5-10 times more than the daily average

Short expiration time frame

• This implies an expectation of a quick movement happening before the expiration date

Far out of the money

• The strike is very far from the spot rate, implying an expectation of a large movement

Large increase in open interest

• This indicates a new or “fresh” position