1. Real-World Example: Following a Sweep Order
Context
A few days before a major tech company’s product launch, large call sweeps appeared on the UnusualFlow dashboard. These sweeps hit near the ask price at multiple exchanges, all within seconds.
Step-by-Step Breakdown
Identify the Signal: A group of call sweeps, each with high premiums, executed back-to-back.
Check the Stock’s Action: The stock had been stagnant, but these sweeps suggested someone expected a sharp move.
Volume & OI Analysis: Volume on that strike was double the open interest. By the next morning, OI had surged, confirming new positions rather than closing old ones.
Market Response: Over the next 48 hours, the stock rallied 5%, and the call contracts spiked in value.
Aftermath: As the product launch date approached, implied volatility rose, further boosting the call premium.
Key Takeaways
Urgent sweeps at or near the ask often point to strong conviction.
Rising open interest signals genuine accumulation.
Combining time-sensitive news events with flow data can provide an early edge.
2. Institutional Trades vs. Retail Trades
Why It Matters
Institutions (e.g., hedge funds, banks) tend to make larger, more coordinated trades, often flagged as block or sweep orders. Retail traders, in contrast, usually trade smaller lots.
Analyzing Volume Spikes
High Dollar Premium: Large institutions sometimes drop six or seven-figure premiums on a single option strike. When you see a sudden spike in premium, it often hints at institutional involvement.
Execution Type: Watch for block trades and cross orders. These can indicate big, negotiated transactions away from the public quote.
Timing: Institutions often place trades near major news events, earnings, or macro announcements. Retail flows can be more scattered throughout the day.
Open Interest Changes
Sign of Commitment: Institutions typically hold positions longer if they remain bullish or bearish on a theme. If OI keeps climbing in a single strike, that’s a clue large traders are sticking around.
Compare to Daily Volume: A big institution can shift the entire Vol/OI ratio overnight.
Key Takeaways
Large size and focused timing hint that “smart money” is at play.
Retail trades often appear at the bid or ask in smaller increments and may follow the broader trend rather than start it.
Distinguishing between retail and institutional flow lets you gauge the market’s true drivers.
3. Rolling Strategies Through Earnings
Scenario
A fund holds call options that have appreciated as the underlying stock nears its earnings date. They want to stay in but reduce risk from the looming volatility crush.
Steps to Roll
Closing Current Position: Sell the existing calls, often capturing profits.
Opening New Contracts: Buy further-out expiration calls (or puts) at possibly different strikes.
Why Roll?: The institution expects more upside (or downside) beyond earnings but also wants to avoid the sharp IV drop after results.
Indicators on UnusualFlow
Simultaneous Close & Open: Within minutes, you’ll see a series of trades where the old contracts are sold, and new ones are purchased for later expirations.
Premium Shift: The net premium might stay large, showing continued conviction, or drop somewhat if they’re reducing overall exposure.
Strike Changes: Traders might move to a higher strike (calls) or lower strike (puts) if they’re moderating risk but still want a seat at the table.
Key Takeaways
Rolling is a way to extend a bullish or bearish view while managing the immediate volatility crush post-earnings.
Observe changes in open interest across expirations to confirm whether a position truly rolled or just closed.
Final Thoughts
Case studies help transform theory into practical insights:
Following a Sweep Order: Learn to spot high-conviction plays backed by urgent, large-volume trades.
Institutional vs. Retail: Recognize the telltale signs of bigger players shaping the market flow.
Rolling Through Earnings: Understand how skilled traders manage open positions around high-volatility events.
Use these real-world examples alongside UnusualFlow’s data to sharpen your entries and exits. By watching premium amounts, order timing, and OI shifts, you’ll gain a clearer view of the market’s hidden drivers—and be better prepared to act on them.