Volume Distribution
Trading activity patterns across strikes
Volume Distribution shows options trading activity by strike price, revealing where traders are actively positioning.
What is Volume Distribution?
Volume distribution displays the number of contracts traded at each strike during the trading day, showing real-time market interest.
Reading the Chart
| Feature | Meaning |
|---|---|
| Tall bars | High trading activity—”hot” strikes |
| Call volume (positive) | Active call trading |
| Put volume (negative) | Active put trading |
| Volume spikes | Unusual interest at specific strikes |
Key Insights
- Hot strikes: High volume indicates active positioning or hedging
- Volume vs OI: High volume relative to open interest = new positioning
- Asymmetry: Call-heavy or put-heavy volume reveals sentiment
- Unusual activity: Spikes may indicate informed trading
Volume/OI Ratio
| Ratio | Interpretation |
|---|---|
| < 0.5 | Low activity, existing positions |
| 0.5 - 1.0 | Normal trading activity |
| 1.0 - 2.0 | Above average interest |
| > 2.0 | Unusual activity, new positioning |
Filters
| Filter | Use Case |
|---|---|
| DTE | Near-term for day trading, longer for swing positioning |
| Delta | ATM options (0.3-0.7) for most liquid strikes |
| Moneyness | Focus on actionable price ranges |
Use Cases
- Find active strikes: Where is the market focused today?
- Spot unusual activity: Volume spikes may precede moves
- Confirm other signals: High volume + gamma wall = stronger level
- Gauge sentiment: Call vs put volume ratio
Note: Volume shows trading activity, not direction. High volume can be buying or selling, opening or closing positions.
