# Reading Sentiment

> Four strategies to trade options flow sentiment with Snapshot. From following the flow to fading extremes, use the ratio to time entries and confirm direction.

Source: https://tradeecho.com/docs/features/snapshot/reading-sentiment (updated 2026-03-15)

Four strategies to trade options flow sentiment with Snapshot. From following the flow to fading extremes, use the ratio to time entries and confirm direction.

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## 1. Follow the Flow

### Strategy

When flow ratio hits 3x+ in one direction, trade that direction. Strong flow = strong signal.

### Setup

- **3x+ bullish** = Buy calls or bull spreads
- **3x+ bearish** = Buy puts or bear spreads

### Example

Monday morning: $45M bullish flow vs $12M bearish flow = **3.75:1 ratio**. Strong bullish conviction. Look for call entries on pullbacks or breakouts.

### Execution

1. Snapshot shows 3x+ ratio
2. Confirm with chart (support, breakout, volume)
3. Enter in flow direction
4. Stop below key level (bullish) or above (bearish)

### Risk

- 3x can reverse. Use stops.
- Don't chase extended moves. Wait for pullback or confirmation.

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## 2. Contrarian Plays

### Strategy

When flow hits 5x+ extreme, consider fading. Crowd may be too one-sided.

### Setup

- **5x+ bullish** = Possible put or short setup
- **5x+ bearish** = Possible call or long setup

### Execution

1. Snapshot shows 5x+ extreme
2. Look for exhaustion on chart (reversal pattern, overbought/oversold)
3. Enter opposite to flow
4. Tight stop - if flow continues, exit fast

### Risk

- Extremes can get more extreme. Size small.
- Use only when chart confirms (reversal candle, RSI extreme, etc.).

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## 3. Flow Shifts

### Strategy

When sentiment flips from bullish to bearish (or vice versa), trade the new direction. Reversals = momentum trades.

### Setup

- **Bullish to bearish** = Put entries
- **Bearish to bullish** = Call entries

### Execution

1. Monitor Snapshot throughout the day
2. Notice ratio flip (e.g., was 3:1 bullish, now 2:1 bearish)
3. Confirm on chart (break of support, volume surge)
4. Enter in new flow direction

### Risk

- False reversals happen. Confirm with price action.
- Early entries can get stopped. Wait for clear shift.

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## 4. Ticker-Specific Sentiment

### Strategy

Search specific stocks in Snapshot. Use for watchlist prep, earnings plays, or sector focus.

### Setup

- Filter by ticker
- Compare flow to sector or market
- Use for entry timing on known setups

### Example

You're watching XYZ for a breakout. Snapshot shows 4:1 bullish on XYZ vs 1.5:1 on sector. XYZ has relative strength in flow. Higher conviction on the breakout.

### Execution

1. Add ticker to filter
2. Check ratio vs historical or vs sector
3. Use as confirmation for your thesis
4. Enter when flow + chart align

### Risk

- Single-ticker flow can be noisy. Combine with OptionFlow for trade-level detail.

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## Monday Morning Example

**Scenario**: Pre-market, Snapshot shows $45M bullish flow vs $12M bearish flow.

**Ratio**: 45 / 12 = **3.75:1** bullish

**Interpretation**: Strong institutional call buying. Market participants are positioned for upside.

**Action**: Look for long setups. Confirm with chart. Consider calls on pullbacks or breakouts. Avoid aggressive puts unless chart shows clear reversal.

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## Quick Reference

| Strategy | Ratio | Action |
|----------|-------|--------|
| Follow the Flow | 3x+ | Trade flow direction |
| Contrarian | 5x+ | Fade extreme |
| Flow Shifts | Reversal | Trade new direction |
| Ticker-Specific | Any | Confirm thesis |

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## Next Steps

- [Quick Start](https://tradeecho.com/docs/features/snapshot/quick-start) - Get started with Snapshot