Options Flow refers to real-time tracking of options transactions as they occur. While open interest shows cumulative positions, flow shows what's happening now—revealing institutional activity, sentiment shifts, and potential positioning changes before they appear in end-of-day data.

Flow vs. Open Interest

Aspect	Options Flow	Open Interest
Timing	Real-time	End of day
Shows	Individual transactions	Cumulative positions
Best for	Detecting activity shifts	Calculating exposure levels
Updates	Continuous	Once daily

Flow and open interest are complementary. Flow tells you who's active and what direction they're trading. Open interest tells you what positions exist in aggregate.

What Flow Data Contains

Each options transaction includes:

• Symbol: The underlying and option contract
• Strike & Expiry: Which contract traded
• Size: Number of contracts
• Price: Execution price
• Side: Buy or sell (when determinable)
• Exchange: Where it executed
• Time: Timestamp to the millisecond

Large block trades, sweeps across multiple exchanges, and unusual size relative to open interest all stand out in flow data.

Reading Flow for Directional Bias

The challenge with flow is determining whether a trade is:

1. Opening a new position, or
2. Closing an existing position

A large call buy could be:

• Bullish: Opening a new long call
• Bearish: Closing a short call (covering)

Context matters. Flow at strikes with low existing open interest is more likely opening. Flow that reduces open interest is closing.

Institutional Footprints

Large players leave distinctive patterns:

Block Trades

Single large transactions (often 500+ contracts) executed at once, typically negotiated off-exchange and printed to tape.

Sweeps

Aggressive orders that "sweep" across multiple exchanges simultaneously, lifting all available liquidity. Sweeps indicate urgency—someone wants the position now.

Unusual Activity

Volume significantly exceeding normal levels for that contract. When a typically quiet strike suddenly sees 10x normal volume, someone knows something—or thinks they do.

Flow and Exposure Changes

Options flow directly impacts exposure calculations:

1. New positions open → Open interest rises → Exposure increases at that strike
2. Positions close → Open interest falls → Exposure decreases
3. Positions roll → OI shifts between strikes/expiries → Exposure profile changes

Monitoring flow helps anticipate how exposure will change before the official OI update.

0DTE Flow Dynamics

Zero-days-to-expiration options have unique flow characteristics:

• Morning: Positions establish, flow is directional
• Midday: Activity often slows, positions digest
• Afternoon: Aggressive closing flow as expiry approaches

0DTE flow can move intraday exposure dramatically because positions open and close within hours, not days.

Limitations of Flow Analysis

Flow data has important caveats:

• No intent visibility: We see trades, not motivations
• Hedging ambiguity: A call buy might hedge a short stock position
• Spread trades: Multi-leg orders appear as separate transactions
• Dark pools: Some institutional flow doesn't print immediately

Flow is one input among many—valuable for context but not a crystal ball.

VannaCharm's Approach

We integrate live options data via broker connections to estimate intraday open interest changes. This allows our exposure calculations to reflect current positioning rather than yesterday's snapshot.

For details on our real-time data integration, see: Launching Our Tradier OAuth Connection

Related Concepts

• Open Interest and Dealer Exposure - How OI feeds exposure models
• 0DTE Options - Extreme intraday flow dynamics
• Gamma Exposure (GEX) - How flow changes gamma levels