Newsletter Nov 8

Why do some traders seem to know exactly when to get in and out of trades?

Like they have some kind of crystal ball that tells them precisely when a stock is about to move?

After years of studying the markets, I’ll let you in on something I discovered when I turned profitable...

Those traders are watching something most day traders never even think about - Options Flow.

Now, before your eyes glaze over, let me break this down in simple terms…

What is Options Flow?

Options flow is the record of large options trades on a stock, often indicating what “smart money” is doing.

When big traders buy lots of call or put options, they’re making a bet that a stock’s price will move and observing this flow can give us clues about where the “big money” is going.

A few weeks ago, I was watching Palantir, and something interesting caught my attention.

Someone was steadily buying calls, 500 contracts at a time.

And these weren’t massive orders that would grab headlines…

They were consistent and methodical.

This is exactly what smart money looks like in action.

They’re not making splash plays or trying to draw attention.

They’re quietly accumulating positions, piece by piece, like a master chess player setting up their board.

And if you want to make "Smart Money" moves in the market follow these 3 steps:

    1.    Look for Unusual Options Activity: Use a scanner or options flow tool (many trading platforms have them) to find stocks where large numbers of calls or puts are being traded.

    2.    Watch for Consistency: Look for steady accumulation, like several orders of the same size, rather than random large trades.

    3.    Context Matters: Remember, not all big trades mean price will move in that direction – it could be a hedge. Analyze if the options flow aligns with technical patterns or news for extra confirmation.

This is the kind of edge that turned my trading around. It’s not about following the smart money blindly – it’s about understanding what they’re doing

and why.

And once you get that?

The market starts to make a lot more sense.

To Your Success,

Team Theta Warrior