A block trade is, as the name suggests, a single large order that hits the Unusual Options Activity Tape all at once.
A Sweep is a large order that is broken up and hits the tape in many different small orders.
Here is an example of Block Trade:
And here is an example of a Sweep ( admittedly not the biggest one) but note how it was broken up.
A Calendar spread is when you sell an option and buy another one with a more distant expiration date. This can be created with either puts or calls. For example, let’s say you wanted to play Netflix with calendar spread because you figure that the stock has dropped too far too quickly and will bounce…
The Thinkorswim platform can be a bit intimidating and hard to navigate especially if the only other platform you have known is something like Robinhood or one of those plain vanilla tools. But Thinkorswim is like a Swiss army knife of trading and is really a powerful platform once you learn your way around it. In…
This is the process of satisfying put exercise or call assignment. In either case, stock is delivered. In the case of indexes, delivery involves the transfer of cash equal to the settlement value of the index minus the strike price of the options contract. See also: Options Assignment, Automatic Exercise, American Style Option
A Box Spread is simply a combination of two vertical spreads. These spreads are used by professional Options traders who are trying to take advantage of a situation where the cost of the spreads (both verticals) is less than what the verticals would be worth when they expire. They consider this to be a type…
Tracking Options Flow can be very useful if you know how to take advantage of it. It basically allows you to see what the big traders are doing in real time. The common thinking is that these big traders know something that others don’t and are taking a position in anticipation of a move. However,…
These are Option contracts that have intrinsic value. A call option is ITM if the market price of the underlying asset is greater than the strike price of the option. A put is ITM if the price of the underlying asset is less than the strike price. In the image below, “A” marks the In…
