How to Use Options Data to Interpret Market Sentiment
Investors can use option trading data to interpret the way that option traders feel about the future trajectory of a given company. The purchase of at-the-money and out-of-the-money call options is considered to be a bullish signal where as the purchase of at-the-money and in-the-money put options is considered to be a bearish signal.
For the most part, we try to ignore more complex option trades from these overviews, as they might be part of a larger trade (or a hedge) that don’t particularly indicate any directional opinion.
Front-Month Option Chain for Canopy Growth Corp.
Possible Catalysts for the Bearish Sentiment
Earlier today, the company announced that it had issued $2,500,000 CAD in common shares of Canopy Growth for a reason that is too vague to decode. The company is also expected to report Q1 earnings for fiscal 2019 before the management team hosts a conference call on August 15th to discuss the results.
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