We are hoping this to be an easy and simple lesson to introduce options to you. By following Options Basics' articles, you should be able to understand options and how to utilize options to either profit or protect your stock.
Volume for options is a measure of how many contracts have changed hands.
As the volume for stocks, trading volume for options is an indicator of an option's current interest. when trading options, pay attention to the volume of them for it is often an indicator of option liquidity, while another measure of option liquidity is the open interest of the option.
For example, if the daily volume of the AAPL $110 Sep.17 call option contract is 94, this means that on that day, 94 option contracts to purchase AAPL shares at $110 before Sep. 2021 were traded.
The higher this daily volume, the more liquid this option contract becomes as compared to options with a lower daily volume. However, because each day brings a new daily volume, it is not the most accurate measure of option liquidity.
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As mentioned above, high option volumes provide clues as to investor interest or sentiment. Take it further, pay attention to the unusual options activity.
Unusual options activity, which means high volume relative to recent historical averages, can help investors to catch up with the interests and "Big Bets" of large institutions, which provides valuable insights as to how the market perceives a price movement and may reflect a bullish or bearish indicator.
Please stay with us for more on options basics!
If there is anything that you didn't understand in today's Options Basics article, simply leave a comment below and we will try to explain more to you!
By Bayo
Comment(12)
Hi, can I Sell Put options in moomoo platform ?
Yes you can
Finally Free Comm for option trading
what is the difference between "long call" vs "short call"
Can I exercise my long call on Moomoo?
If you mean in advance, you need contact CS
bullish and bearish call
good you
can we sell covered calls on moomoo?
Good
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