There are many strategies to monitor the option flow. Some traders prefer to focus on large premiums. Some prefer to focus on volume. Some prefer to focus on sweep trades. But when large premium and volume are sweeping on one out-of-the-money strike at a single expiration, we should probably pay attention.
From morning to afternoon, significant premium of put options hit the tape on a single strike and a single expiration. One specific order was for $3.8 million in premium. By the afternoon, ~$5.8 million in puts were traded.
Regardless of whether you’re bearish or bullish on the market, you have to take notice when big orders like this come in. Let’s review the timing, level, and expiration of the order.