Lesson

Tape speed & volume | Options Educator

Gauge flow acceleration and adjust your order type when momentum flips.

In this lesson

What is the Tape?

  • The tape shows every trade in real-time
  • Trades at ask = aggressive buyers
  • Trades at bid = aggressive sellers
  • Tape speed indicates momentum and urgency

Volume Analysis

  • High volume validates price moves
  • Accumulation = high volume up, low volume down
  • Distribution = high volume down, low volume up
  • RVOL compares today's volume to average

Trading with Flow

  • Flow = direction of aggressive orders
  • Trade with the flow, not against it
  • Use marketable limits, not market orders, when flow is strong
  • Wait for pullbacks to enter with momentum

Options Flow Reading

  • Unusual options activity can signal informed positioning
  • Sweeps indicate urgency - more significant than regular trades
  • Distinguish between opening and closing trades
  • Look for clusters of similar flow, not single trades

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