The options market is often viewed as an excellent indicator of market sentiment and potential direction. By monitoring options trades, we can identify bullish or bearish signals in the market. The Fintel Options Flow product is one such tool that provides near real-time data on large block trades made by institutions, filtering the data to show only the most significant trades.
The Options Flow Leaderboard for stocks, provided by Fintel, ranks companies by net premium (call premium - put premium) paid in large block trades during the current or most recent trading day. The companies at the top of the leaderboard have the highest bullish sentiment, as determined by large options buyers.
It is important to note that the numbers provided in the leaderboard only represent aggregate figures of large block trades made by institutions and are not total-market figures. They should not be interpreted as such.
The current leaderboard for the last 7 days reveals some interesting trends in options trading. Topping the leaderboard is Tesla Motors Inc. (TSLA), which has seen bullish sentiment from large options buyers, with a net premium of $128,287,516. Home Depot Inc. (HD) follows in second place, with a net premium of $81,656,014, and Paypal Holdings Inc. (PYPL) in third place, with a net premium of $44,047,368.
A quick technical analysis of the 3 top stocks: TSLA, HD and PYPL
In the above video, I discuss three equities that recently had significant block transactions from institutional investors.
- Technically, I am not interested in purchasing TSLA stock at the present time, but I might become more interested if and when the monthly candle closes above the EMA 20, which is now at $224. In the technical analysis video, I explain why I'd be much more interested in buying at approximately $140.
- Next, I looked at Home Depot stock and, again, I'm not too enthused about purchasing it right now for the long term. However, if it bounces off the anchoring VWAP, currently at 282, I could consider a shorter-term swing long move. It would be prudent for long-term purchasers to wait until two consecutive monthly candles close above the EMA, which is now sitting at $299, before making any purchases.
- Finally, I analyze PayPal stock, noting that it has dropped by nearly 74% from its peak. To me, this looks like it could be "creating a foundation" (bullish) for at least a partial retracement, with a possible profit goal near the round number of $100 and profit taking at $87.
The options trading activity of these companies provides valuable insights for investors who are looking for opportunities in the market. For example, the bullish sentiment towards Tesla Motors could indicate that investors are confident in the company's future prospects. Similarly, the high net premium paid in large block trades for Home Depot could suggest that institutions are optimistic about the company's potential growth.
Overall, the Options Flow Leaderboard provides a useful tool for investors to identify trends and gauge sentiment in the options market. However, investors should always exercise caution and conduct thorough research before making any investment decisions based on this data.
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