Option Alerts (Call Bearish | Put Bullish)

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I am wondering if you would be open to explaining the following information in relation to the actual stock price and the projection this info will potentially take it…

(AAPL is trading at around $120.00 at time of writing this question (range 119.63 – 123.60):
• For AAPL (NASDAQ:AAPL), we notice a call option sweep that happens to be bearish, expiring in 1 day(s) on March 5, 2021. This event was a transfer of 915 contract(s) at a $123.00 strike. This particular call needed to be split into 12 different trades to become filled. The total cost received by the writing party (or parties) was $51.2K, with a price of $56.0 per contract. There were 15290 open contracts at this strike prior to today, and today 59530 contract(s) were bought and sold.

(PYPL is trading at around $238.00 at time of writing this question (range 236.44 – 254.80):
• Regarding PYPL (NASDAQ:PYPL), we observe a put option sweep with bullish sentiment. It expires in 1 day(s) on March 5, 2021. Parties traded 331 contract(s) at a $240.00 strike. This particular put needed to be split into 6 different trades to become filled. The total cost received by the writing party (or parties) was $81.8K, with a price of $250.0 per contract. There were 685 open contracts at this strike prior to today, and today 808 contract(s) were bought and sold.

Options Alert Terminology
– Call Contracts: The right to buy shares as indicated in the contract.
– Put Contracts: The right to sell shares as indicated in the contract.
– Expiration Date: When the contract expires. One must act on the contract by this date if one wants to use it.
– Premium/Option Price: The price of the contract.

I should take a course or read a book on options but maybe you could provide some guidance till I have the time and find the right book (primer).

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Asked on March 4, 2021 11:50 am
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Private answer

Well, the bullish and bearish sentiments are from the options themselves.

When you write a covered call, you're giving someone the option to buy shares off you at a particular price. So, you want the stock to stay under the strike price, so it expires useless and you keep the premium.

When you sell a put, you're giving the purchaser of the put the right to sell stocks to you at a particular price. So, you want to see the stocks go up in price, above the strike price, so the option expires useless.

That is where the bearish (selling calls in hope of stock price staying lower) and bullish (selling puts to hope stock price remains higher) come into play.

If I were to say one book, it would be the Rookie's Guide To Options Trading.

Have a look at it. Great book.

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Posted by Dan Kent
Answered on March 4, 2021 3:23 pm