From the Desk of Steve Strazza @sstrazza and Alfonso Depablos @Alfcharts
August 30, 2025: This post has been opened to the public for illustrative purposes.
This is one of our favorite bottom-up scans: Follow the Flow.
In this note, we simply create a universe of stocks that experienced the most unusual options activity — either bullish or bearish, but not both.
We utilize options experts, both internally and through our partnership with The TradeXchange. Then, we dig through the level 2 details and do all the work upfront for our clients.
Our goal is to isolate only those options market splashes that represent levered and high-conviction, directional bets.
We also weed out hedging activity and ensure there are no offsetting trades that either neutralize or cap the risk on these unusual options trades.
What remains is a list of stocks that large financial institutions are putting big money behind.
And they’re doing so for one reason only: because they think the stock is about to move in their direction and make them a pretty penny.
Then we flip through our list of stocks flashing unusual activity and pick the best setups using many of the same technical filters we do for our other scans.
And, just like that, we’ll follow the money flow and fatten our own pockets along with some of the world’s most powerful financial institutions.
Whether the transaction was executed on the bid or the offer also matters. Which counterparty was the aggressor definitely matters.
Without this information, we wouldn’t know whether the trade was a bullish or bearish bet.
For example, a massive amount of put contracts executed at the ask is a bearish bet (all else equal). But did you know that a bunch of these very same puts executed on the bid is actually bullish?
In this scenario, the seller is the aggressor as they are shorting the puts, which is similar to buying calls on the ask and betting on higher prices.
But no need to worry about any of this. We’re doing it all for you! All you need to know is that we’ve designed a list of stocks that some of the largest firms on Wall Street feel very bullish or very bearish on.
Then we apply our technical analysis to identify asymmetric trade setups to follow them into some of these names.
Due to the nature of the catalysts applied to create this universe of stocks, most of these trades will tend to be on the shorter-term end of the spectrum. We’ll typically be looking to take profits a few months out at most.
But there will be some splashes whereby participants put on “leaps” or other long-term strategies, which could warrant a longer time frame.
Either way, after running this scan internally for years now, we’re confident we’ll find some great trade ideas on this list. Better yet, they’ll come from both the long side and the short side.
At the end of the day, the idea for this universe based on unusual options activity is to follow the big money into some of their highest-conviction trades and profit along with them.
Of course, as with any stock we’re in… we'll also have the primary trend at our back.
Here’s this week’s list of stocks with unusual options activity, powered by our friends at The TradeXchange:
*Click to enlarge view
Our first setup today is a $235B semiconductor company, Broadcom $AVGO:
Broadcom experienced some volatility in early 2022, resulting in a whipsaw right around a critical Fibonacci extension level.
However, after this corrective period, buyers stepped in and recovered part of the losses. We're now waiting for a decisive breakout above our risk level before we get involved.
As for the relative trend, AVGO has been a secular leader for the past decade. More recently, it made new all-time highs versus the broader market.
We don't see any signs of that leadership slowing down.
We're buyers above 592 with a target of around 862 over the next 6-12 months.
Last but not least, we have a $2.5B British online luxury fashion retail platform, Farfetch Ltd $FTCH:
FTCH experienced a nasty whipsaw in December of last year, making new all-time lows before price quickly recovered. This action resulted in a major failed breakdown at a shelf of former lows.
When we look at momentum, shown in the bottom pane of the chart, there is a bullish divergence in place as the 14-week RSI continues to make higher lows despite the lower lows in price.
If and when FTCH reclaims 6.30, the squeeze is on, and we should expect a fast move to the upside. We want to be long with a target of 12.80 over the next 3-6 months.
