A Review of Unusual Options Activity & Whales’ Strategies
On September 16th, 2021,among the underlying components of the NYSE, we reported on unusual options activity in Dell Technologies Inc. (DELL)., which opened then at $100.21.
Reported then were the following trades:
- A total of 5,000 contracts traded on the $95 strike put option at the bid, dated for December 17th, 2021, representing approximately 500,000 shares.
- An additional 5,000 contracts traded on the $95 strike put option also at the bid, dated for October 15th, 2021, representing an additional 500,000 shares.
- And finally, a set of 5,000 contracts traded on the $90 strike put option also at the bid, dated for December 17th, 2021, representing another 500,000 shares.
Most significantly was the fact that options order flow was significantly bullish, and that there was a noteworthy high of 28,558 call volume traded on September 13th, 2021, prior to the above whales’ trades.
Retailer Traders Following the Flow
The next day, on September 17th, 2021, one Twitter user posted similar findings, but alerted to the fact that a significantly sized order had been opened, a total of 9,800 contracts traded on the $105 strike call option at the ask, dated for November 19th, 2021, representing approximately 980,000 shares.
Later, another Twitter user also echoed the callout, as the orders had come in above-ask and were significantly sized.
Additional Unusual Options Activity That Followed
On September 20th, 2021, Dell Technologies, Inc. opened at $98.85, and the above retailer reported that there was additional incoming flow.
The above historical flow and all the activity therein for the October 15th, 2021 $100 strike call option with their requisite open interests implied all of the positions were still open, they deduced.
The Whale Exited Their Position & Retail Traders Followed in the Wake
On September 23th, 2021, Dell Technologies, Inc. opened at $99.75, and the first retail trader reported that they had observed the whales beginning to exit their positions via the Unusual Whales Flow tool.
Upon review of brokers, it was evident that with the volume on the $105 strike call option for November 19th, 2021, that the whales were indeed exiting their positions.
Following whales trades blindly exactly as they trade them is never recommended--but investigating and Following the Flow can give you a significant edge over the markets!
Unusual Options Activity After the Wake
As of Thursday, September 23rd, 2021, once the whale had exited their position, the options flow had begun to shift.
The premium of the options order flow was now 61.63% bearish versus 38.37% bullish.
As seen, call and put volume have begun to trend upward since the highs around our first report while Dell Technologies Inc.’s price has continued to trend up.
Open interest had declined from its high on September 17th, 2021 of 194,799 to 182,013 on September 22nd, and it would be anticipated that open interest would continue to decline as fewer contracts were resolved at Friday’s expiration, as well as positions being closed outright.
The most active chains were at the $105 strike price, amounting to $56,794,020 bearish premium. 90.4% of these $30,000 or more orders were in bearish premiums and 89.95% were bid-side orders; however, 98% of this premium was from call options.
However, seen above, for betting of premiums of $1,000 or more, there was a different sentiment, wherein the most active chain was still the $105 strike...
However, bullish premium was leading at $6,279,824, and the most active expiration, aside from this report’s weekly expiration, was December 17th, 2021, again in bullish premium being spent, amounting to $2,665,192.
In other words, $30,000+ premium whales were exiting their orders while $1,000+ whales were still trading them bullishly.