What is options flow and how to read it

Options flow is the real-time record of the options trades printing in the market: which contract traded, at what price, in what size and — most importantly — how aggressively. Read it well and it tells you where the money is moving before the move is obvious in the stock price.

Why aggression matters (ask vs bid)

Not every trade carries the same weight. The key is whether it printed at the ask (above ask) or at the bid (below bid):

• Aggressive buy (at ask): someone paid the offer to get in now. That's directional pressure — the buyer is in a hurry.
• Aggressive sell (at bid): someone hit the bid to get out or open short. Pressure the other way.
• At the mid: usually hedging or positioning, not a clear directional bet.

Whoever pays the offer is the one pushing. That's why a burst of aggressive call buys while price climbs is a far stronger signal than a single large block printed at the mid.

What to look for

• Large blocks (premium ≥ $1M): institutional money, not retail.
• Repeats: the same strike hit several times within minutes.
• Volume > Open Interest: a new position, not a close.
• Sustained cadence: aggressive flow that keeps coming while price follows. This is what separates a real signal from an anecdote.

Call vs Put: the right read

• Buy Call = directional bullish bet.
• Sell Call = possible resistance / wall.
• Buy Put = bearish or hedge — needs context to tell apart.
• Sell Put = support for the underlying.

Mind liquidity: in an illiquid options chain, flow can be misleading. A good reading flags that data as unreliable instead of forcing a conclusion.