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Shares of Alibaba Group Holding NYSE: BABA saw some unusual options activity on Tuesday. Extraordinarily large volume compared to historical averages is one indication of unusual options market activity, review casper binary options.
Volume refers to the total number of contracts traded over a given time period when discussing options review casper binary options activity. Open interest is the number of unsettled contracts that have been traded but not yet closed by either counterparty. In other words, open interest represents the quantity of contracts that individual parties have written but not yet found a counterparty for i.
a buyer finding a seller, or a seller finding a buyer. Another indicator of unusual options activity is the trading of a contract with an expiration date in the distant future. Additional time until a contract expires generally increases the potential for it to grow its time value and reach its strike price. It is important to consider time value because it represents the difference between the strike price and the value of the underlying asset.
These trades are made with the expectation that the value of the underlying asset is going to change dramatically in the future, and buyers and sellers will benefit from a greater profit margin. For the latter case, the exposure a large investor has on their short position in common stock may be more meaningful than bullish options activity. Unusual options activity is an advantageous strategy that may greatly reward an investor if they are highly skilled, but for the less experienced trader, review casper binary options, it should remain as another tool to make an educated investment decision while taking other observations into account.
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Analyzing Alibaba Group Holding's Unusual Options Activity. by Benzinga Insights. Using These Options Strategies Unusual options activity is an advantageous strategy that may greatly reward an investor if they are highly skilled, but for the less experienced trader, it should remain as another tool to make an educated investment decision while taking other observations into account.
Posted-In: Movers. Related Articles Understanding Alibaba Group Holding's Unusual Options Activity Alibaba Group Holding NYSE:BABA shares experienced unusual options activity on Thursday.
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