📝 Why These Weird Multi-Leg Option Rolls Might Not Matter — Transcript

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1. 0:07Uh, let's see here. Next, we got Tommy
2. 0:09requesting. Uh, let's see here. He says,
3. 0:12"SMCI." What do we got here? Let's look
4. 0:14at SMCI. SMCI,
5. 0:18a nice strong day.
6. 0:22What are you looking at right there?
7. 0:23What is that screenshot? Options, time,
8. 0:24and sales. So you see looks like a
9. 0:27fourleggger 10,000 size trade kind of
10. 0:30going on here. Let me if I could just
11. 0:33find it in the flow. SMCI. Let's try
12. 0:3625K.
13. 0:38There it is. So it's some kind of roll.
14. 0:42You see this thing quite often.
15. 0:44So we have four legs. Four legs. Well
16. 0:48that we can see here. Let me just click
17. 0:49to make sure. Yeah. So it's four legs.
18. 0:51Four legs. Two expiring tomorrow. two
19. 0:54expiring next week. The ones expiring
20. 0:57next week are guaranteed openers given
21. 1:00the interest or the volume to open
22. 1:02interest ratio. As you can see here,
23. 1:04there's 17,000 contracts traded on the
24. 1:06SMCI 57. These guys right here, 17,000
25. 1:11traded, only 1,200 open interest. So,
26. 1:14very clearly uh opening activity here.
27. 1:17Similar story, 16,000 or 17,000. We'll
28. 1:19just round up. 17,000 volume, zero open
29. 1:21interest. Not the same story over here.
30. 1:25Uh there is more volume than open
31. 1:27interest. However, if I just click back
32. 1:30like three days, maybe I might see a
33. 1:32very similar size candle. Nope, not
34. 1:34three days. What's seven days? So 7 days
35. 1:37ago, we had
36. 1:405k, 5k,
37. 1:42here's 10k. So that's probably them. So
38. 1:45I'm going to go to the I'm going to look
39. 1:46at the historical volume in open
40. 1:48interest. I'm going to look at the open
41. 1:49interest and I should see a day I should
42. 1:51see on June 18th 10,000 contracts traded
43. 1:54and on the next day I should see
44. 1:5510,000ish
45. 1:57more open interest. Lo and behold 10,000
46. 2:00traded 10,000 more open interest. So
47. 2:03this is very likely them getting into
48. 2:05the position whatever it was. This was
49. 2:07also a multi-le trade. I'm going to
50. 2:08guess that this was also in its own
51. 2:10right a four-legged trade. There's a lot
52. 2:12of these flows like here. Let's just
53. 2:14look at uh if we look at the default big
54. 2:16multi-leggers. Coin is a big one. They
55. 2:18do this with coin. Palunteer
56. 2:22uh like coin.
57. 2:24Here's you know a big four-leggger roll.
58. 2:26Let's just zoom out slightly. You don't
59. 2:29have to zoom out too far to see similar
60. 2:31sized candles that are likely the
61. 2:34entrance of this leg of the trade. Now,
62. 2:38you know, there's an opening component
63. 2:39to it as well, but like I just don't
64. 2:41really think that they're directional
65. 2:42flows.