Why Using Option’s Liquidity Works …
Imagine that a large Institutional Investor or Wall Street firm was going to start buying a lot of stocks tomorrow … enough to push the market in a given direction. If you were then …. given you knew “what” you were going to do, wouldn’t you take advantage of what you were about to do? The best way to take advantage of the situation is to buy something with leverage and buy it “ahead of time” … like Futures or Options.
The Definition of Options …
Options are a measure of the expectations for a stock or equity during the next 30 days. When money is flowing net positive into Options, the Options Liquidity is moving “UP”. When money is flowing net negative … out of Options, the Options Liquidity is moving “DOWN”. (FYI … this information is posted daily for our members every day.)
Here is how the chart (below) works:
There are 3 components to the chart. At the top of the chart, you can see the “Options Timing Indicator”. This indicator is an action summary of the two indicators at the bottom of the chart.
The two indicators at the bottom show the Inflowing Liquidity levels on Options, and the associated bias of those levels. Note the there are two horizontal lines on the “Inflowing Liquidity on the Options graph” … one is Green, and the other is Maroon. When the Inflowing Liquidity is above the Green line, the inflowing money levels are saying that the market is in a strong positive posture. When the Inflowing Liquidity is below the Maroon line, the inflowing money levels are saying that the market is in a strong negative posture.
When you get the chance, spend a few minutes looking at this chart as it will be a “good investment of time”. When doing so, also spend a little time looking at the trend lines on the charts … they tell an important story as well.