The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone, Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to answer the question, “Can options volume spikes predict market tops and bottoms?” To be fair, I did a very long stint in researching online, trying to find a lot of articles, research, any publications on really, definitive back-testing and data scraping, I guess to see if option volume spikes actually have any correlation necessarily with market tops and bottoms. I think the data is really fuzzy in this area. I think there's a lot of subjective nature to it. So, what is a volume spike, how much more does it have to spike above the average or above a moving average of volume. And what I found is that generally, volume spike obviously come around binary type events where people are trying to hedge or position their portfolio for something that either may happen in the future or something that maybe just happened. You could take maybe say a presidential election or the vote on Brexit. You typically see a lo