Unusual Options Activity (UOA)

How Draconic reads it

Unusual activity stands out because most options trading is routine: market making, hedging, and rolling existing positions. When volume at a specific strike jumps to five or ten times its average, with the trades executing as sweeps rather than passive limit orders, the pattern suggests a participant with conviction or information is building a new position. UOA is a starting point for investigation, not a standalone trading signal. The next question is always: is this directional or protective? New OI opening on a sweep at an out-of-the-money strike, with no obvious existing position to hedge, tilts toward directional. Large put buying alongside a known equity long position tilts toward hedging. Context resolves the majority of ambiguous cases.