Understanding Unusual Options Activity

Unusual options activity (UOA) occurs when specific options contracts trade at volumes far exceeding their historical averages, often signaling that institutional traders or informed investors are placing strategic bets on a stock’s future price movement. These anomalies can act as early indicators of major market shifts, whether driven by public events like earnings reports or hidden catalysts such as undisclosed mergers. In this guide, we’ll break down how to identify UOA, interpret its implications, and leverage it alongside other market signals to refine your trading strategy.