One of the best ways to spot opportunity is by tracking “hidden” institutional trading.
What Are Options Sweeps in Institutional Trading?
Why Institutions Hide Large Trades Across Multiple Exchanges
We can do this just by watching what are called “options sweeps,” which institutional traders use to hide large trades from the average trader. Options sweeps execute across multiple trading venues via Intermarket Sweep Orders (ISOs), as governed by FINRA trade reporting rules. With sweeps, a trader is trying to hide their trade by breaking up a large order into smaller pieces under the radar of average traders.
However, with access to that institutional information, we can get a better idea of the potential direction of a stock. For example, if an institution just picked up $1.5 million worth of Apple call options, it can mean the firm is bullish on the direction of Apple. Just as investors track how to follow the smart money into nvidia, observing large-scale options activity reveals where institutional capital is quietly accumulating. Perhaps, after doing some due diligence, we can even follow their lead and jump into the Apple stock, too.
Real-World Case Study: Tracking the Marathon Digital (MARA) Sweep
Bitcoin Halving Cycles and Equity Momentum
For traders looking at crypto-adjacent equities, tracking institutional order flow is one of the best ways to trade bitcoin stocks without directly holding cryptocurrency. Look at Bitcoin mining stock, Marathon Digital (MARA), for example.
Just moments ago, a $479,300 sweep went by on the June 21, 2024 17 call options.
With the latest Bitcoin halving, MARA is starting to push higher, as we’ve seen with prior BTC halving events. Look at the halving event on May 11, 2020, for example. Around that time, MARA bottomed out at around $0.52. Heading into the event, MARA ran to $0.72. From there, it would hit $44.35.
With the 2016 halving event on July 9, MARA traded at $30.77 ahead of it. Heading into the halving, it was up to $45. After, it would hit $48.48 a share. With the 2012 event on Nov. 12, MARA traded at about $104 and would drop to a low of about $38.48 and later recover to a high of $116 by late 2014.
Confirming Institutional Entries with Technical Indicators (RSI & MACD)
In addition, MARA is just starting to pivot higher after catching support at around $14. It’s also pivoting higher from over-extensions on the only 3 technical indicators you'll ever need, including RSI, MACD, and Williams’ %R. It’s also just to pivot higher from over-extensions on RSI, MACD, and Williams’ %R. From its last traded price of $17.04, we’d like to see it retest $24.65 initially.
How Retail Investors Can Follow Institutional Order Flow Safely
While options sweeps highlight where big money is moving, prudent investors should never enter a trade on order flow alone. Pairing institutional signals with fundamental research—such as how to analyze a balance sheet and screening for economic moat stocks—ensures the underlying company has the solvency and earnings power to sustain a long-term rally.
[ VIDEO EMBED PLACEHOLDER ] Title: Hidden Gems: 3 Stocks Wall Street Is Ignoring* Embed URL: https://www.youtube.com/@behindthemarkets* Caption: Watch Dylan Jovine discuss how institutional trading dynamics create mispricings in high-upside stocks.*
Frequently Asked Questions About Institutional Trading
Q1: What is an options sweep?
A: An options sweep is a large, market-order transaction that is broken into smaller order fragments and executed simultaneously across multiple public exchanges. Institutional traders use sweeps to fill large positions quickly at the current market ask price without alerting market makers or causing an immediate price surge.
Q2: How do options sweeps differ from block trades?
A: A block trade is a single, privately negotiated trade of at least 10,000 shares or $200,000 executed outside the open market. In contrast, an options sweep is executed aggressively across public order books, indicating that the buyer wants immediate execution and is willing to pay across multiple price levels, signaling urgent conviction.
Q3: Can retail investors track institutional options sweeps?
A: Yes. Retail traders can track options sweeps using professional market scanners, unusual options activity monitors, and real-time order-flow feeds that aggregate Intermarket Sweep Orders (ISOs) from major exchanges.
Q4: Does an institutional call sweep guarantee a stock will rise?
A: No. While a call sweep indicates strong bullish sentiment, institutional trades can also represent hedges against existing short equity positions. Smart investors always combine order flow signals with fundamental balance sheet analysis before deploying capital.
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Written by Dylan Jovine