Unusual Options Volume & Other Clues in – The Stock Replacement Covered Call Strategy For Investment Stock Options (part 2)

by David Jenyns on March 5, 2006

Unusual Options Volume & Other Clues in – The Stock Replacement Covered Call Strategy For Investment Stock Options (part 2)
Follow in the footsteps of elephants. What do we mean by this? When an investment stock options option volume and implied volatility increase significantly, it is often a harbinger of things to come. Although the investment stock options price action may seem quiet and uneventful, not reflecting any unusual activity, the investment stock options option activity can be telling a very different story. An unusual and greater than normal increase in the investment stock options option volume or implied volatility can be an indication that large, informed smart money players (the elephants) are placing bets on upcoming events or announcements. These announcements can often have a significant impact on the price of the underlying investment stock options, as with important corporate earnings, or other news.

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