We believe HIRO is the best system available for viewing the impact options are having on stocks in real-time. There are two unique insights that HIRO provides. The first is the impact over a time period during the live trading day when large options hedging flows may have a cumulative impact on the volatility and direction of a stock or index’s movement. Secondly, there are acute trades which take place that will need to be hedged, and by tracking this activity there may be opportunities to adjust positions.
Knowing the options pressure can help your trading by empowering you to follow trends, or, to identify when options pressure shuts off and a stock is more likely to revert back to a previous price level. To take advantage of such moves, and find the most actionable stocks inside HIRO, this quick three-step checklist can help you identify stocks that may have trading opportunities right now.
Step 1: Review the Major Indices
The goal in step one is to look to see which indices are being driven by current options pressure. Inside HIRO, the dashboard defaults to the ETFs for three most options-influenced US indices. Let’s take a look at SPY. Each chart comes with filters to change what’s displayed in your viewing pane. First, select "Total” at the top, then “All Trades,” and then 30 minutes as the choice for the rolling window, as this time frame provides a good balance of of what we refer to as “signal vs noise.”
Step 2: Narrow In on Puts Versus Calls
The goal in this step is to see if traders are buying calls to speculate on stocks that could break out or buying puts to have protection, or insurance, in place in case of a downturn. To see the impact of puts vs. calls, in particular, you just change your filter from “Total” to “Puts/Calls.”
Step 3: Go Deeper on Same Day Options for Immediate Trading Impact
Same day options can have a dramatic impact on stock prices. To see the shortest dated options, often called 0DTE options, you can click “Total” again at the top of the filter page, turn off “All Trades”, and then choose "Next Expiry." This view will reflect the total impact of the 0DTE trades.
While you can choose many ways to customize your HIRO profile, we believe these three steps provide a great way to view both the major indices and your favorite stocks. As you develop your own preferences, we are confident that HIRO's unique insights into the real-time option flow impact can improve your trading and empower you to see what the professionals see.