Why Options Flow is so Important!

Good Morning,

I wanted to reintroduce myself and why closely tracking options flow is so important.

First, who am I? My name is Caleb Gregory. I’ve been a full time options trader for 6 years. I’ve focused primarily on selling options and have expanded out to buying options as well by using options flow.

My strategies are effective and have been recognized multiple times with exclusive invites to the New York Stock Exchange trading floor.

Options flow refers to tracking large or unusual options trades in the market. It’s important because it can reveal what sophisticated traders (“smart money”) are positioning for before the move happens.

Here’s the short breakdown:

1️⃣ Shows Institutional Sentiment
Large funds, hedge funds, and market makers often express views through options. When you see unusually large call buying or put buying, it can signal bullish or bearish expectations from well-capitalized traders.

2️⃣ Identifies Potential Price Moves Early
Options activity often happens before major stock moves, earnings surprises, or news events. Watching flow can give clues about where big players expect the stock to go.

3️⃣ Highlights Key Price Levels
Heavy activity at certain strikes can create support/resistance zones because dealers hedge around those levels. This can influence where price gravitates.

4️⃣ Reveals Strategic Positioning
Not all options trades are directional bets. Flow can reveal spreads, hedging, volatility trades, or income strategies, which helps you understand market structure and positioning.

5️⃣ Confirms Trade Ideas
If your technical or fundamental thesis aligns with strong options flow, it can increase confidence in the trade.

It is my goal to use this newsletter to show you interesting trades that I find on a daily basis. I plan to write to you every Mon - Fri mornings. I’ll share interesting options flow, Gamma heat maps (I’ll save that lesson for another time), and trades that I see.

We can use this information to create substantial returns in the market. There is no “perfect” recipe for the market. However, this can be a great indicator on the directional movement of a stock in the short and mid term.

I’ll give you a quick sample right now.

This is unusual and urgent option flow coming in on the ticker SNDK. In particular, this whale is loading up on the $610 strike with an expiration of 3/20. The urgency is shown in the repeated buys and that almost all the buys came in at ask and even above ask or “AA” as it’s shown in the image above.

This type of alert is known as an Urgent Repeater. Urgent repeaters are repeated aggressive buying on a particular strike with large sums of capital. Other important bullish aspects to note is that all of these are “sweep” orders. That’s what we want to see. The other important factor is that almost all of these orders came in at the ask or above ask which is another indicator that the buyer didn’t have time or want to try to get filled at the bid or even below the bid.

These are positions that I like to trade, to be honest. And these are the types of positions that I will attempt to share with you.

I am here to help you. If you have questions, feel free to respond. I am trying my best to bring more attention and access to these types of tools for retail traders.

I’ll talk to you all on Monday with some detailed trade breakdown’s and potential places to make a little profit.

Until then…

-Caleb