The six sources behind Tradytics trade ideas
By Faizan Ahmad. Updated .
Every Tradytics trade idea comes from one of six sources, each a pattern in options flow that held up in Tradytics' study of 10.9 million prints: in-the-money put buying in liquid, high-priced names, repeat call buying in ETFs, call volume far above open interest, opening call positions at fair implied volatility, bursts of bullish premium, and market-wide call tides. When a print matches a source, the idea is to buy that same contract, a call or a put, and each idea shows a take-profit plan and its source's own track record. Pro sees ideas as they open at /ideas; Free and Plus see the previous day's.
What does each source watch for?
| Source | The print | What has to be true |
|---|---|---|
| In-the-money put buying | A put bought | At least 2% in the money, on a stock priced $300 or more that trades $20M to $500M a day |
| Repeat call buying in ETFs | An ETF call bought | 2% to 10% in the money, and the same contract bought on at least 2 of the last 5 sessions |
| Call volume far above open interest | A call bought | The contract's volume today is 3 to 10 times its open interest, implied volatility is under 60%, and the stock is under $30 |
| Opening calls at fair implied volatility | A call bought | The print is half to all of the contract's open interest, implied volatility is within 5% of the stock's normal, and the stock's 20-day realized volatility is 20% to 35% |
| Bursts of bullish premium | A call bought | The stock's bullish premium over a quarter hour runs 2 to 5 times its 20-session norm, the stock rose 0.5% to 2% the session before, and SPY is up 1% or more on the day |
| Market-wide call tides | A call bought in a single stock, within 10% of the money | Net directional premium in SPY, QQQ and IWM over the same quarter hour is unusually bullish, about one standard deviation or more above normal |
What does each source mean in plain words?
- In-the-money put buying. Someone pays up for puts that already have real value in an expensive, heavily traded stock. In-the-money puts move closely with the stock, so this is a direct bearish bet, not a cheap lottery ticket. It is the one put source in the set.
- Repeat call buying in ETFs. The same in-the-money ETF call keeps getting bought, session after session. Repetition across days looks like a position being built, not a one-off.
- Call volume far above open interest. Today's volume in one call is several times the contracts that existed this morning, so most of it is new. Volume vs open interest covers why that matters.
- Opening calls at fair implied volatility. A sizable new call position bought while the options aren't expensive for that stock. Buying when volatility is normal avoids paying up for a move that is already priced.
- Bursts of bullish premium. Call buying in one stock suddenly runs several times its usual pace, after a modest up day, on a day the whole market is rising.
- Market-wide call tides. When index flow swings hard to the bullish side, calls bought in single stocks at the same time ride the tide. These arrive in batches on strongly one-sided days.
Five of the six sources are call buying. That's what the data supported: the only put pattern that held up in both the study and the later replay was in-the-money put buying in liquid, high-priced names. Why the rest were dropped is in how Tradytics trade ideas are built.
What rules apply to every source?
- A clean, single-leg print. No spreads or other multi-leg orders, no late or canceled reports.
- Regular hours. Printed between 9:30 AM and 3:59 PM New York time.
- Shorter-dated. The contract expires within 45 days.
- Once per day. Only the first matching print per source, ticker and session becomes an idea.
- The side is confirmed. A buy must print at or above the ask. At the ask vs at the bid explains the tag.
- Expensive or junk contracts are out. Implied volatility above 1.3 times the stock's normal, at-the-money contracts under $0.25 and 0DTE buys in the last 30 minutes never become ideas.
- The trained filter. A model scores each matching print and hides the weakest 40%.
- Tight markets where it helps. In-the-money put buying, call volume far above open interest and opening calls also need a bid/ask spread of at most 10% of the midpoint.
What is the take-profit plan on each idea?
Each idea shows how to take profits, picked from a study of hundreds of exit rules on the same ideas:
| Situation | Take-profit plan |
|---|---|
| Most ideas | Take profit when the option is up 100% (it doubles), or sell half at up 50% and the rest at up 100% |
| Market-wide call tides | Sell within 3 to 5 sessions |
| When SPY is 5% or more below its 20-day high | Take profits earlier, at up 25% to 50% |
There is no stop loss. In the exit study, stops hurt at every level tried: option prices often dip hard and then recover, and a stop sells the dip. Time stops hurt too, except for market-wide call tides, which is why that source has its own holding window. Take-profits helped. Without a stop, the most an idea can lose is the premium paid for the option.
What does an idea show?
The source in plain words, the exact contract (ticker, call or put, strike, expiry), the take-profit plan, and the source's track-record score. The score blends the source's own resolved ideas with a base rate and is recomputed monthly; it is never an AI's guess. Open the evidence to see how ideas from that source have resolved, how many there were and how many months were up.
Common questions
Are Tradytics trade ideas calls or spreads?
Single calls and puts. Each idea is the contract the flow bought, so you see exactly what triggered it.
Why are most Tradytics ideas calls?
Because the patterns that held up on real option prices were mostly call buying. The only put source that survived is in-the-money put buying in liquid stocks priced $300 or more.
Do trade ideas have a stop loss?
No. In Tradytics' exit study, stops cut results at every level tried, because option prices often dip and recover. The plan is a take-profit, with a shorter hold for market-wide call tides.
How many ideas come in a day?
It varies with the market. The premium burst and call tide sources fire in batches on strongly one-sided days, so those days bring more ideas than quiet ones.
Can the sources change?
The rules are frozen. Changing any condition makes it a new source, which has to pass its own replay on past sessions before it produces ideas.
Sources
- FINRA: Options: FINRA's investor guide to options, including that an option buyer's maximum loss is the premium paid.
- Cboe Options Institute, glossary: strong open interest, tight spreads and active volume as signs of a liquid option.