Education & Tips

Understanding the WhaleStream

Before using the WhaleStream, we recommend becoming one with the WhaleStream.

Understanding the WhaleStream

Before using the WhaleStream, we recommend becoming one with the WhaleStream. 

Take some time to sit back and observe. Examine the flow and what those equities did both before AND after order flow came in. Every equity will react differently to flow, so do your homework and try to get a feel for how things react before following the whales. The Whales may buy into a position today, but the stock may not move for a few days. Study. Study. Study. 

The Default Option Flow Will Display Orders Filled AT or ABOVE the ASK (Assumed Buys)

If certain conditions are met, we may display some orders that were filled mid-market but lean closer to the ASK side. 

Toggle the Sales Flow Switch & the Flow Will Display Orders Filled AT or BELOW the BID (Assumed Sales)

If certain conditions are met, we may display some orders that were filled mid-market but lean closer to the BID side. 

Never Blindly Follow The Whales. Use all of the data available to make an educated decision before entering a trade.

  • Option flow is just one piece of a large puzzle. Try to understand why a Whale may find a trade appealing. Use charts and technical analysis and do your due diligence before entering a position. 
  • Use Historical Flow (COMING SOON). Go back to previous days and see if there has been a consistent influx of flow on a symbol or to see if the flow has changed sides from bullish to bearish (or vice-versa) on a specific symbol. Catching the flow changing sides can be an indicator of an incoming trend change and could potentially produce mad tendies. 
  • Cross reference the Equity Blocks & Dark Pool Prints. Is someone accumulating a large equity position and front running it with options? Always do your due diligence to try to determine the intent!
  • Toggle to the sales side of the options flow. These orders were filled at or below the bid which implies the order was a Whale Sale. Remember, sentiment is inversed on sales. If someone sells a call, it is bearish and if someone sells a put, it is bullish. Seeing what whales are selling can be equally important as what they are buying. 

**Whales take the time to analyze the position and you should too! 

Option Order Flow tends to be the first sign of movement.

Often times, before a stock has a big move (up or down), you will see that there was Whale flow that came in prior or the Whale flow may have even been what triggered the move. 

We never know a Whale’s Intent, but that doesn’t mean you shouldn’t try to!

  • We see the orders, but we don’t know how long a Whale intends to hold the position or if the position is a hedge. 
  • Although we don’t know the intent, try to think of why a Whale may enter (or exit) the position. Is there news? Does the chart imply an upcoming breakout?  Put yourself in the Whale’s shoes (or fins) and try to see what they see. 

Stock Flow Vs ETF Flow

  • Large put positions on ETFs, are oftentimes hedges. The flow on individual stocks tends to paint a more clear picture and provide better insight. 
  • If ETFs AND Stocks are seeing a lot of flow in the same directions (either calls or puts), it is a much more telling sign that the market is going to be moving in that direction. 

Buy the Rumor. Sell the News.

  • This phrase still holds very true. If the news is already out and the stock has already had a recent large move, remember the phrase and consider sitting it out.  Many times, a stock will run up on a rumor and the second it is confirmed, have a brief spike just to get slammed back down from investors taking profit.

Steady Flow vs New Flow.

  • If a symbol / ticker has been receiving consistent flow in a specific direction and has been moving in that direction for some time now, it probably is best to sit it out. DON’T FOMO. Either wait for a pull back or wait for a trend change. Plan your entries/exit strategies.
  • If you start to see the flow flip on a specific symbol / ticker, it may be an indication of a trend change and you may be able to get in early enough to ride the whole wave. 

Don’t Count Out the Baby Whales.

  • Many times, before there is significantly large order flow, there are some smaller Whale orders that could have started the party. Pay close attention to these as well. 

Earnings Plays = Gambling.

  • While earnings plays can pay big, they can also lose big. Consider an earnings play a complete gamble. Stonks (Stocks) can annihilate earnings and still the stock will tumble. Alternatively, the company can miss on earnings and the price can run up like the dickens. Or they can react exactly how you'd expect... Earnings beat can cause it to run and missing can cause it to fall. Do you get the point? There is no rhyme or reason to the way the stock reacts to the earnings and if you enter the position knowing it can go to $0, then at least you have your expectations set right. 

Always Stick to Your Plan.

  • Leave your emotions at the door. 
  • Figure out why you are entering a position. 
  • Determine your entry point AND exit strategy BEFORE entering your position. 
  • Remember why you entered your position!
  • FOLLOW THE PLAN! Most people suffer their biggest losses when they stray from their plan. 



More Posts in Education & Tips
How to Determine Buys vs Sales with Options Flow?

Using the Bid & Ask to determine Buys vs Sales.

How To Use Option Flow 101 - WhaleStream

A beginners guide to option flow and how to use it. It is recommended to know the basics of options trading before learning about flow.

How To: WhaleStream Option Flow Sentiment Tool

How are option market sentiments calculated? What is a Put to Call Ratio? How to use WhaleStream's Option Flow Sentiment Tool.

👀

Follow the Whales in real-time.

🎁

Take 50% OFF With Code: BLACKFRIDAY22