# OptionFlow Quick Start

> Master real-time options flow in 10 minutes - institutional trades, premium filters, sentiment analysis, and high-momentum day trading setups.

Source: https://tradeecho.com/docs/features/optionflow/quick-start (updated 2026-07-26)

Option Flow tracks real-time options trades, revealing institutional "smart money" moves through detailed metrics like size, value, sentiment, and execution. It acts as your scanner to identify stocks with breakout potential for high-momentum day trading.

![OptionFlow scanner showing real-time options flow data](https://tradeecho.com/docs/img/app/optionflow.png)

---

## What is Option Flow?

### What You Get

- **Real-time Trade Data**: See every options trade as it happens
- **Smart Money Tracking**: Follow institutional activity
- **Advanced Filtering**: Target exactly the trades you want
- **Momentum Identification**: Spot breakouts before they happen
- **Premium Tracking**: See total capital committed

### Why Option Flow Matters

Options are front-running indicators. When institutions buy calls, they expect price to rise. When they buy puts, they expect price to fall. Option Flow shows you where the money is flowing before it becomes obvious on the chart.

**Example Alert**: "Large trade detected: SPX 3700 Puts 01/16/26 @ 23.90 - Size: 4000x - Value: $9.6 Million."

Someone just bet $9.6M that SPX will drop below $3,700. That is significant.

### Target Returns

| Trade Type | Target Returns |
|------------|-----------------|
| Short-term options | 50-150% |
| 0DTE trades | 100-300% |
| Momentum plays | 200-500% |

High risk equals high reward. Only risk 1-2% per trade.

---

## Configuring Your Filters

These filters target high-momentum plays that day traders use for 200-500% returns:

| Filter | Setting | Purpose |
|--------|---------|---------|
| Price | Less than $2.00 | Targets low-cost, high-leverage options |
| Size | Greater than 500 | Identifies large trades, institutional interest |
| Sentiment | Bullish | Focuses on trades betting on price increases |
| Execution | At Ask | Selects aggressive buys, showing urgency |
| DTE | Max 21 days | Prioritizes short-term options; set DTE max to 0 for 0DTE day trading |

### Setting Up Your Filters

1. Open the Option Flow interface
2. Click the Filter button
3. Input the settings from the table above
4. Enable Auto Refresh for real-time data
5. Or start from the built-in presets - Directional, Repeaters, Sweeps, OTM calls, OTM puts

### Pro Tips

- **Day Trading**: Use 0DTE or 1-2DTE only
- **Momentum Plays**: Start from the **Sweeps** preset, then tighten DTE max to 14 and raise the premium floor for conviction
- **Built-In Presets**: Switch between Directional, Repeaters, Sweeps, OTM calls, and OTM puts for different strategies
- **Update Daily**: Market conditions change - adjust filters accordingly

---

## Understanding the Data Format

### Trade Display Format

"SPX 2800 Puts @ 11.00 - Size: 6000x - Value: $6.6 Million."

| Part | Meaning |
|------|---------|
| SPX | Underlying stock or index |
| 2800 | Strike price |
| Puts | Option type (betting price goes down) |
| @ 11.00 | Premium per contract |
| 6000x | Number of contracts |
| $6.6 Million | Total premium (Price x Size x 100) |

### Key Metrics

**Size (Contracts)**: Number of contracts traded. Size indicates institutional interest.

- Under 100 = Retail
- 100-500 = Mixed
- 500-2,000 = Institutional
- Over 2,000 = Whale activity

**Value (Premium)**: Total capital committed.

- Under $10K = Small bet
- $10K-$100K = Medium interest
- $100K-$1M = Big interest
- Over $1M = Huge commitment

**Sentiment**: Directional bias. Bullish = calls (price up). Bearish = puts (price down). Neutral = hedging.

**Execution**: How the trade was executed. At Ask = aggressive buyer. At Bid = willing seller. Between = negotiated.

**Flow Score**: Trade Echo's conviction score for each print - shown as a column, and you can set a Flow Score minimum in the Filters panel to hide low-conviction rows.

---

## Finding Momentum Setups

### Trade Clusters

Multiple bullish trades on the same stock indicates strong buying pressure. This is one of the strongest signals.

**Example**: Four alerts on XYZ, all bullish, all at ask, all 0DTE. Total 2,800 contracts, $525K premium. This is a momentum play.

### Other Signals

- **High Premium Trades**: Premiums over $100K show significant capital commitment
- **Volume Over Open Interest**: Suggests new positions being opened
- **Strike Clustering**: Multiple trades on same strike = key level importance

### Sorting Options

- Sort by Premium: Find the biggest commitments first
- Sort by Volume: Find the most active trades
- Sort by Size: Find the largest contract sizes

---

## Confirming with Price Action

Option Flow identifies candidates; price action validates entries. Never trade from alerts alone - always check the chart first.

### What to Look For

1. **Breakouts**: Price breaking above resistance with high volume + heavy call buying in Option Flow
2. **Support Bounces**: Price rebounding from support + shift from puts to calls in Option Flow
3. **Bullish Patterns**: Hammers, bullish engulfing, morning stars + bullish sentiment in Option Flow

### Chart Indicators

- RSI: Oversold (30) before buying calls
- Moving Averages: Price above 20MA = bullish trend
- Volume: Higher than average confirms move
- VWAP: Price above VWAP = bullish intraday

---

## Executing Your Trades

### Entry Strategy

1. Option Flow alert received - trade meets your filters
2. Check price action - validate on chart
3. Select strike - same strike as alert or slightly OTM
4. Check liquidity - tight bid-ask spread, high volume
5. Enter quickly - prices move fast on momentum

### Liquidity Check

**Good Liquidity**: Bid-ask spread under $0.05, volume over 100, open interest over 500

**Poor Liquidity**: Bid-ask spread over $0.10, volume under 50, open interest under 100 - avoid

### Target and Stop Table

| Trade Type | Target | Stop Loss | Exit Time |
|------------|--------|-----------|-----------|
| 0DTE | 50-100% gain | 20% below entry | 1-2 hours before close |
| 1-3 DTE | 75-150% gain | 25% below entry | Same day if up big |
| 1-2 weeks | 100-200% gain | 30% below entry | Watch support |

---

## Risk Management

### Golden Rules

- Position Sizing: Only risk 1-2% of capital per trade
- Stop-Losses: Always set 20-30% below entry
- Time Exits: Exit 0DTE trades 1-2 hours before expiration
- Liquidity: Only trade options with tight spreads
- Track Performance: Review what works, stop what does not

### Position Sizing Calculator

- Account: $10,000
- Max Risk: 2% = $200
- Option Premium: $2.00
- Stop Loss: $1.60 (20% below)
- Max Loss Per Contract: $0.40
- Contracts: $200 divided by 0.40 = **5 contracts max**

### Common Mistakes

- Over-sizing: Risk 2% max, not 50%
- No stop loss: Always set stop before entering
- Holding into close: Exit 0DTE by 2 PM
- Poor liquidity: Only trade tight spreads (under $0.05)

### PDT Rule

If you have less than $25K: limited to 3 day trades per 5 trading days. 0DTE = day trade. Choose your 3 best setups per week only.

---

## Quick Reference

### Daily Workflow

1. 9:30 AM: Open Option Flow, enable Auto Refresh
2. 9:31 AM: Apply filters (Size over 500, Price under $2, DTE max 21)
3. 9:35 AM: Watch for first high-value alert
4. 9:36 AM: Check price action on chart
5. 9:40 AM: If confirmed = Enter trade with stops
6. Throughout day: Monitor for additional clusters
7. 2:00 PM: Exit all 0DTE positions
8. End of day: Review performance

### Decision Tree

```
START → Option Flow Alert
Size >500 contracts?
├─ NO → Ignore (not big enough)
└─ YES → Value >$100K?
    ├─ NO → Ignore (low commitment)
    └─ YES → Single direction (bullish OR bearish)?
        ├─ NO → Ignore (hedge)
        └─ YES → Check price action:
            ├─ Supports direction? → YES = ENTER TRADE
            └─ Multiple alerts on same stock? → YES = STRONG SIGNAL
```

### Top 5 Rules

1. Filter everything - only look at trades that meet your criteria
2. Verify always - check price action before every trade
3. Size smart - risk 1-2% max per trade
4. Set stops - always know your exit point
5. Exit early - close 0DTE by 2 PM