How to Identify Unusual Options Activity Before Making a Trade

Learn how to identify unusual options activity using volume, open interest, premium, sweeps, blocks, strikes, expirations, and price action.

Odd patterns in options activity can be one of the most fascinating indications in the options market. If there is a sudden increase in contracts at a specific strike price, if there is an unusually big premium transaction, or if there are repeated trades in the same expiration month, traders will halt and look into the situation. Yet there is an important difference between noticing unusual options activity and actually understanding what it means. The importance of that distinction lies in the fact that an options trade doesn't carry a label indicating whether it is 'bullish', 'bearish', 'a hedge', or an 'institutional position'. For example, the same call transaction might be included in a bullish purchase, a covered call, a spread, or part of a broader portfolio strategy. Similarly, a large put transaction could be intended for bearish speculation, for portfolio protection, in order to generate income, or as a combination of these. The options market has also seen exceptionally high levels of activity. In the second quarter of 2026, Cboe reported an average daily volume of listed options of 72.8 million contracts, which was more than 19% higher than in the corresponding period the previous year. During that quarter, Cboe also noted that nearly 10 million contracts each day were traded in block transactions consisting of more than 1,000 contracts. It is difficult to keep an eye on every transaction because of the scale involved. In such a case, options flow analysis and a special options activity scanner can be of use. Rather than consider each large transaction as a signal, traders can make use of flow data to identify the kinds of activity that warrant further investigation. What makes option activity unusual? Unusual options activity usually means options trading that is different from the typical activity for a given stock, ETF, strike, or expiration. Such activity may be considered unusual because of extremely high volume, an unusually high premium, several large transactions, substantial trading in a contract which is normally not very active, or because the volume is large in comparison with the existing open interest. There is no single figure which automatically renders an options trade 'unusual'. What may be considered unusual for one option could be quite ordinary for another option that is heavily traded. Context is important; the trader must therefore compare the current level of activity with normal volume, liquidity, open interest, the features of the contract, and with activity at related strikes and expirations. A very useful distinction is that between options volume and options open interest : volume refers to the number of contracts traded during a given session, whereas open interest denotes the number of contracts that are still outstanding. Since the two figures relate to different things, they should not be regarded as interchangeable. For instance, imagine that an option has a total open interest of 2,000 contracts and