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Option Sweeps - What The Data Means & How Retail Option Traders Can Benefit

Sweepers move quickly and they are tactical. When the time is right, they enter with urgency all the while staying incognito to the untrained retail trader’s eye. They slip right under the radar by splitting their orders across multiple exchanges utilizing smart routing - Concealing their true order size and executing in milliseconds.

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An option sweep is a market order that is split into various sizes to take advantage of all available contracts at the best prices currently offered across all exchanges. By doing so, the trader is “sweeping” the order book of multiple exchanges until the order is filled completely. These orders print to the tape as multiple smaller orders that are executed just milliseconds apart - When tallied, they can often times add up to some serious size. These type of sweep orders are especially useful for institution traders (smart money) who prefer speed and stealth.

There are two main reasons why retail options traders care about sweep orders:

  1. Sweeps are large orders, meaning the trader who placed the order has a hefty bank roll, i.e. “smart money.”

  2. Sweep orders indicate that the trader wants to take position in a hurry, while staying under the radar - Suggesting that they are anticipating a large move in the underlying stock in the near future.

By keeping an eye out for option sweeps, retail traders can get an idea of what the market’s “smart-money” high-rollers are thinking - and exactly how they are positioning. The Opinicus Trader’s Thinktank Options Flow Scanner helps retail options traders do exactly that. The sweep scanner tracks the multi-exchange footprints of “smart-money” sweep orders and consolidates the data into an easy to interpret format, then prints it directly into the main feed of the Thinktank in realtime. The scanner has detected some interesting trades in recent history - See the sweeps below in Facebook ($FB), Micron Technology ($MU), and The Walt Disney Company ($DIS).

Click any of the 3 images below to expand

$FB call sweeps see large gain after news reported.

$MU put sweeps were detected all day as the stock continued lower.

$DIS bullish call sweeps detected over a 2 day period as the stock continued higher.

Due to the leveraged nature of options, some of these buys from the aforementioned trades saw explosive gains (50% return and higher) within the same day. We were able to witness these option sweeps in real time as they hit the tape. Pairing options flow data together with technical analysis can help options day-traders complete the “big picture” of what is happening with a particular move in stocks.

When it comes to options sweeps and options flow data, there is plenty of noise - Much of which should be ignored. The options flow data that is shared within the Trader’s Thinktank is not only real-time, but it is also curated to only present data that matters. Our scanner identifies the “smart money” transactions and then analyzes various data points on each order as they hit the tape including the order size, order type, speed, pattern in which it fills, volume, and average volume to name just a few. Every order the Trader’s Thinktank reports to you has a high potential of being market moving options data. Remove the noise and zone in on what truly matters.

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