When investors or brokers execute a stock or option trade, these orders are routed to an exchange, such as the New York Stock Exchange (NYSE) or the Chicago Board Options Exchange (CBOE). These exchanges are where all trades (even electronic trades) actually take place.
This fact makes it hard to read the market. But two particular figures – option volume and open interest – can help traders gain insight into what is happening in a particular option series.
Many traders know how to use this information, but a brief review may be helpful. (more…)
There has been a lot of chatter recently about trading volume (or lack thereof). Specifically, the popular topic of discussion has been how particularly abysmal volume was during the month of August.
Potash (NYSE:POT) outperformed the market yesterday after the rumor mills reignited with takeover speculation. The latest theory is that Sinochem could be interested in acquiring the agro-chemical company.
The OptionsHouse Hotlist scans unusual option volume during the trading day. This tool is available to all OptionsHouse customers, including those with 
The Hotlist, which scans unusual option volume throughout the session, is available to all OptionsHouse customers, including those who sign up for a 
The Chicago Board Options Exchange, which is right across the street from where I’m sitting as I write this, is bringing their shares to market tomorrow, 11.7 million of them initially under the ticker CBOE. They are looking to raise at least $339 million with Goldman Sachs as the lead underwriter; shares are anticipated to be priced around $27-$30.
For more information on how the Hotlist tool functions, refer to 
When evaluating a trade, some investors look at the volume in the underlying stock as well as open interest, the bid/ask spread, and option volume in order to ascertain if liquidity is adequate. Some stocks tend to have more robust options volume than others, but “heavier” options volume does not necessarily mean the stock is of higher quality. Sometimes, we come across a stock that has seen notably heavy volume at one strike compared to another.
