Basic Points

• In trading, an aggressor is the one opening the trade, either with a market order or marketable limit order. 
• If a trade is merely filled at the midpoint between the bid and the ask, then the aggressor is undetermined. 
• But if buying is done at the ask or above it, then liquidity (price stability from a high amount of bids and offers) is being consumed at fair market value, and this is done by an aggressor. 
• Conversely, if selling is done at the bid or lower, then that is also done by aggressors.

Intermediate: Winning with the SpotGamma HIRO Indicator

HIRO knows who the aggressors are because that information is signed as metadata by the data vendor that SpotGamma uses. Therefore, this information about who is buying and selling options (as shown by HIRO) is model free. This means that it is fully precise and deductive (arriving at decisive conclusions) rather than being inductive (arriving at informed guesses) and blurred by the inherent limitations of models. For example, when HIRO is showing that call option delta (directional exposure) is increasing, then we know that there are net buyers of calls (hitting the ask). And when HIRO shows put delta increasing, then we know there are net sellers (hitting the bid).

For example, calls on QQQ are shown here in orange. Since calls are trending down, this means there is more call selling than put buying (as deltas are moving down and therefore creating a bullish flow). And when puts (shown in blue) are trending down, then this means more puts are being bought than sold, also as a bearish flow. These lines have nothing directly to do with volume and entirely pertain to the running total count of deltas. This same data can also be parsed so as only to analyze zero DTE options.

Advanced: Mechanics of Liquidity

The main significance of aggressors is that the market can never be moved by providing liquidity, but only when that liquidity is taken by aggressors. If enough liquidity is taken by volume, then the liquidity at that price point becomes exhausted and the next-best price will move to the nearest available liquidity in the book. If that liquidity is exhausted as well, then the price will keep moving, and so on. This is usually how price moves in a liquid security (with the other avenue of price movement being the bid and ask dancing around in empty volume). 

However, the thickness and shape of liquidity in the book can certainly determine the ultimate flow of price movement, such as creating too much support or resistance and then exhausting sellers, therefore triggering a reversal.