In options trading, a sweep is typically a large order that is broken into several different smaller orders that can then be filled more speedily on many different exchanges. A sweep order instructs your broker to identify the best prices on the market, regardless of offer size, and fill your order bit-by-bit until the whole order has been filled.

These types of orders are particularly useful for option traders who favour speed over the lowest possible price.

There are two reasons why stock and option traders pay attention when large sweep orders get placed in the options market.

• Sweeps are typically large blocks, meaning that the trader who placed the order has some major financial backing.
• Sweep orders indicate that the buyer wanted to take a position fast, which could imply that they are anticipating a large move in the underlying stock’s price in the very near future.

Use ADVFN’s Options Flow to track option trades for the US market.

By keeping an eye out for large option trades, traders can get a feel for what market high-rollers are thinking ahead of potential stock catalysts.

Remember, options trading involves risks, including the potential loss of your invested capital. It’s crucial to conduct thorough research, seek professional advice if needed, and start with small, manageable positions as you gain experience and confidence in trading options.

GET STARTED

Free and unlimited demo account
Over 2,800 CFD instruments are available for trading on the Plus500 CFD platform
Min Deposit: $100

Disclosure: 80% of retail CFD accounts lose money. Plus500 does not offer spread betting, social trading, or bonds. Furthermore, hedging is strictly prohibited on the Plus500 CFD platform.

The information provided in this article is for informational purposes only and should not be construed as financial, investment, or professional advice. The views expressed are those of the author and do not necessarily reflect the opinions or recommendations of any organizations or individuals mentioned. Always consult with a qualified financial advisor or other professionals before making any financial decisions. The author and publisher are not responsible for any actions taken based on the content provided.