Disclaimer: The below information is intended to describe hypothetical scenarios and should not be considered trading or investment advice.

Condition: Following a HIRO Flow Alert, which indicates higher options impact (not yet how to trade it) - we suggested watching and waiting to see if HIRO’s momentum continues or flatlines/reverses.  

• If the order flow was correlated with a price increase: Once HIRO flatlines, consider buying puts near or at-the-money OR selling a higher credit spread.
• If the order flow was correlated with a price decrease: Once HIRO flatlines, consider buying calls near or at-the-money, OR selling a lower put spread. 

SpotGamma flow alerts indicate substantial order flow in the underlying ticker. However, our analytics indicate that after these flows shut off, the stock reverts back in the previous direction 70% of the time.

Pro Tip: Check the difference between short-dated and longer-dated options flows using the Next Expiry toggle at the top of the chart. Major long term options flows are more impactful in the future, while 0DTE or next expiry flows generate a larger current dealer hedging impact.

For more information, check out our videos on using the HIRO to trade:

Statistics: Check out SpotGamma’s Statistics on how our key levels have performed for the SPX using data from 2018 - 2024.

SpotGamma Alpha subscribers can access the SpotGamma HIRO Indicator here.