The Sizzle Index is a ratio of a security’s current options volume over that security’s daily average options volume over the last five days. So, how can traders get a little volume temperature reading? The Sizzle Index on thinkorswim is an indicator for screening stocks posting unusual options volume compared to their recent draw. It’s also important to be able to track down unusual options volume when it occurs because it could hint at where the underlying stock might go.
When tracking options volume, traders want to discern whether the crowd is taking action-buying or selling-in call options as well as put options. In fact, they may indicate a reversal is taking shape. It’s fitting, then, that large percentage price increases accompanied by thin trading volume are less likely to indicate market direction with any staying power. For instance, a jump in volume that coincides with a big up or down price move may indicate strength in the direction of the change. Options volume is best viewed in the context of other indicators. Learn how the Sizzle Index, available on the thinkorswim® trading platform, can help traders find, filter, refine, and monitor stocks experiencing unusual options activity. Whether or not you’re deep into calls and puts in your own portfolio, simply tracking options volume can be an important part of a trading kit. Learn how the Sizzle Index can help traders find, filter, refine, and monitor stocks experiencing unusual options activity.Tracking options activity can offer insight into market expectations for a particular stock.
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